April 7, 2004 3:25 PM PDT
Dell sees higher first-quarter revenue
The Round Rock, Texas, PC maker said in a statement that it expects its first-quarter sales to reach $11.4 billion, $200 million higher than previously expected, thanks in part to its growth in international markets. Dell kept its earnings-per-share expectation the same at 28 cents for the quarter, the first of its fiscal 2005. Dell's first quarter ends this month.
"Customers around the world want powerful, reliable technology at great prices," Dell President Kevin Rollins said in a statement. "That's true in markets like China and Japan and France--and in the U.S., England and Canada--and why we're seeing rapid, profitable growth."
Assuming that Dell matches its new expectation, Dell's first-quarter revenue will be up 20 percent year over year, while earnings per share will have increased by 22 percent, versus the first quarter of its fiscal 2004, the company said.
The earnings update comes as part of Dell's analyst meeting, a two-day event that began Wednesday afternoon and will continue Thursday morning with a presentation by top Dell executives, such as Chief Executive Officer Michael Dell, Dell Chief Financial Officer Jim Schneider and Rollins.
Even though some analysts expected a financial update from Dell--the company often updates its guidance before its analyst meeting--several reported ahead of the meeting that they didn't expect much in the way of surprises from the company. During the past few quarters, Dell has chugged along, steadily increasing its PC shipments and market share, while garnering more revenue and higher profits.
Thus far, Dell's strategy has centered on building computers with standard components and using its manufacturing and supply chain efficiency to offer lower prices than competitors while still turning a profit. The approach has served Dell well to date, and the company has also been able to apply it to other areas, such as services, printers and consumer electronics devices. Thus, it's unlikely to change things much, if at all, analysts said.
Rollins said in a statement that Dell is seeing strong demand across its range of products and services. Although its fastest growth has been in servers, storage systems, professional services and also printers. Dell launched its own line of printers in March 2003. Since then, it has shipped at least 2 million Dell-brand printers, company executives have said.
Dell will also announce on Thursday that it plans to increase its share buyback in the current quarter, dedicating $1.1 billion to repurchasing its common stock, during the quarter, up from a planned $600 million, the company said in a statement.
Dell ended its fiscal 2004 with a net income of $2.6 billion, or $1.01 per share, on revenue of $41 billion, moving it closer to its stated goal of reaching $60 billion in annual revenue.
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