RESULTS: Dell Computer, the world's leading personal computer maker, said yesterday that earnings were on track to meet quarterly forecasts and it could exceed its revenue target for the first fiscal quarter because of better-than-anticipated strength in the US market.
Mr Michael Dell, chairman and chief executive of the Texas-based company, said corporate demand was improving as companies were replacing products.
Shares in Dell rose 69 cents to $26.88 (€30.6), or 2.6 percent in early trading after the earnings announcement at a meeting with analysts in New York. Other technology firms, including semiconductor-maker Intel, rose on the news.
Dell employs 3,500 of its 35,000 world-wide workforce at its Limerick plant, which makes computers for the European, Middle Eastern and African markets.
Mr Kevin Rollins, president and chief operating officer, told analysts that the Texas-based corporation would increase its sales focus in countries such as Germany and Japan.
Chief financial officer Mr Jim Schneider said Dell had 15 per cent net growth last year compared to an industry decline of 6 per cent, due mainly to an aggressive strategy of seeking increased market share as demand fell off.
Demand for computers would increase this year but recovery would be gradual, he said.
Mr Schneider acknowledged that Dell's improved revenue performance for the first fiscal quarter was due largely to cost-cutting improvements at Dell, rather than a "massive" increase in demand.
The company fought its way to the top in the PC market last year by heavy television advertising and using direct-to-customers sales to cut prices and take market share from rivals Compaq Computer, Hewlett-Packard, IBM and Gateway.
Hewlett-Packard and Compaq plan have agreed a merger that is awaiting the outcome of a shareholder vote tally at Hewlett-Packard.
Last year saw the worst environment the industry had experienced but "in the 4th quarter we felt the market had stabilised", Mr Rollins said, and this was continuing in the first quarter of 2002. In the recovery phase, the company would focus on expanding geographically, he said.
Dell increased its revenue and earnings targets, saying it expects to earn $435 million, or 16 cents a share. This is based on expected first fiscal quarter (February-May) revenue of $7.9 billion, down 2 percent from the fourth quarter but better than analysts' predictions of $7.7 billion in revenue. Mr Schneider said Dell was confident it would meet its new financial targets.
Mr Rollins said Dell's aim over the next few years was to double revenue and increase its "non-client computer" business, which includes storage, software and peripherals, and services, to more than 50 per cent of revenue.
He said that Dell's alliance in January with data storage-company EMC had enabled it to double its market opportunity in the storage segment.
