Technology Briefs

Friday, August 11th 2000, 12:00 am
By: News On 6

Second-quarter revenue at Dell Computer Corp. surged 25 percent due to a strong mix of product sales and lower prices for computer parts, helping the computer maker beat Wall Street expectations, the company reported Thursday.

For the three months ended July 28, Dell earned $603 million, or 22 cents per share. In the year-ago period, Dell posted a net profit of $507 million, or 19 cents per share.

Analysts had expected Dell to show a per-share profit of 21 cents in the second quarter, according to a survey by First Call/Thomson Financial.

Revenue for the three months was $7.7 billion, up from $6.1 billion in the year-ago period.

The company also offered a positive outlook for the remainder of the year.

"Our second-quarter results and expectations for strong industry demand in the second half of the year keep us on track toward our goal of 30 percent full-year sales growth," said Michael Dell, the company's chairman and chief executive officer.

The results were released Thursday after the end of regular trading on the Nasdaq stock market, where shares of Dell fell 6 cents to $41.75. In after-hours trading, shares fell to $40.19.

Some analysts had expected sales to be closer to $7.8 billion, but Dell still did better than other personal computer companies that have suffered from parts supply problems.

"They're growing above market, which is good news for them and bad news for everybody else," Barry Jaruzelski, an analyst with Booz Allen & Hamilton in New York, said of Dell.

Last month, both IBM Corp. and Apple Computer Inc. met earnings estimates but fell short of revenue projections in the most recent quarter.

Sales of items other than base computer systems accounted for $1.3 billion of Dell's revenue, while sales of services worldwide reached $577 million, up 35 percent from a year ago.

The company, based in Round Rock, Texas, reported that it was shipping 22 percent more units than last year, more than the industry average, which floats in the high teens.

Dell "continues to be this virtually unstoppable machine. They just keep cranking out these huge numbers," Mr. Jaruzelski said.

Analyst Steve Kleynhans of the Meta Group in Stamford, Conn., said the PC industry as a whole has been sluggish but should pick up in the second half of the year.

Dell's strong Internet presence continues to help the company's bottom line, he added.

About 50 percent of total sales came from Dell's Web site in the second quarter, averaging more than $50 million a day.

That's up $20 million from the prior year.