Dell Profit, Sales Surge in Third Quarter
Dell Computer Corp.’s profit jumped 31% in its fiscal third quarter as the company regained the No. 1 spot in the personal computer market and continued to lure consumers away from its rivals.
Dell’s profit in the three months ended Nov. 1 increased to $561 million, or 21 cents a share, from $429 million, or 16 cents, a year earlier. Sales rose 22% to $9.1 billion, and sales of workstations, servers and other high-end gear grew 27%.
The Round Rock, Texas-based firm said U.S. shipments rose 33%, while the rest of the industry shipped only 2% more than a year earlier. Dell’s consumer shipments grew 51%.
Dell’s business has continued to improve as its rivals suffer. The most recent victim is Palo Alto-based Hewlett-Packard Co., which briefly became the top PC seller when it bought Compaq Computer Corp. in May.
Dell is more profitable because it sells chiefly over the Internet and by phone, eliminating much of the shipping and inventory costs its competitors rack up. HP is trying to sell more of its machines directly in response.
The latest results matched Dell’s projections of a month ago, and its shares fell slightly in after-hours trading. They had risen 89 cents to $30.94 on Nasdaq in hopes that Dell would exceed those projections.
For the coming quarter, Dell said it anticipated a 20% increase in revenue from the year before, to about $9.7 billion, with earnings per share of about 23 cents. That was roughly what analysts had been expecting.
Dell is introducing printers, hand-held organizers and switches to its lineup to expand into markets dominated by HP, San Jose-based Cisco Systems Corp. and others. And it is selling more data-storage devices, especially those co-branded with industry leader EMC Corp. In the latest quarter, sales of external storage systems rose 73%.
After the earnings release, Dell executives said they weren’t counting on a broad industry recovery in the near future. Both Dell and HP have been cutting prices to spur sales, but there is little hope for a big holiday season for computer sellers.
