July 11, 2002 4:20 PM PDT

Rivals help improve Dell's outlook

Dell Computer on Thursday raised its revenue and earnings outlook for the second quarter, saying it continues to gain market share from computer rivals.

The company said it now expects revenue for the quarter that ends Aug. 2 will reach $8.3 billion, up about 9 percent from last year's second quarter, with earnings of 19 cents per share. On May 16, the company predicted revenue would hit $8.2 billion and projected earnings at 18 cents per share.

"Dell believes it is continuing to gain market share in the midst of weak overall demand," the company said in a statement. Dell said strength in the current quarter "is broadly based, highlighted by growth in the U.S. education, government and consumer business segments."

The company's positive outlook follows recent negative warnings by Apple Computer, Intel and Advanced Micro Devices.

Dell is scheduled to report earnings for the second quarter on Aug. 15.

Dell shares rose in after-hours trading on the news, changing hands recently at $25.37 on the Island ECN. In regular trading, Dell shares were up 26 cents, or 1.1 percent, at $23.93.

In a note to clients late Thursday, Bear Stearns analyst Andrew Neff said the improved profit margins and market share gains at Dell will add to pressure on other PC makers. Neff said Apple is likely losing market position to Dell in the education market, while Dell's increased profitability gives it more flexibility to put price pressure on Gateway in the consumer market.


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