Posted on: Friday, February 11, 2005
Dell quarterly profit jumps 17%
By Michelle Kessler
USA Today
No. 1 PC maker Dell yesterday reported record quarterly revenue, just one day after rival Hewlett-Packard said its CEO was ousted amid performance problems.
Dell Inc. via Associated Press In the current quarter, Dell forecast revenue of $13.4 billion, up 16 percent year-over-year. But Wall Street expected more. Dell shares fell 3 percent in after-hours trading on the news, released after market close.
The uncertainty surrounding HP's search for a CEO is expected to create a chance for Dell to steal customers from the No. 2 PC maker. So, too, is IBM's recent decision to sell its PC division, including its popular ThinkPad laptop, to Chinese PC maker Lenovo.
Dell CEO Kevin Rollins downplayed the opportunity created by competitors' woes. "A somewhat unsettled environment" should help Dell gain share, he said. But, "We're not over-emphasizing the opportunity."
Still, there are few other formidable competitors. Sun Microsystems has never fully recovered from the tech bust. Gateway closed its stores last year after merging with eMachines. Other rivals are smaller: Fujitsu, Acer and Sony.
Chairman Michael Dell "must just be sitting back there in his suite laughing," says PC analyst Roger Kay at researcher IDC.
Dell still has room to grow. The computer market is so fragmented that Dell has less than 20 percent share in most markets, IDC says.
Dell's revenue of $13.5 billion in its fourth fiscal quarter, ended Jan. 28, rose 17 percent from $11.5 billion a year ago because of strong business sales and foreign tax benefits.
Dell service technicians at a company center in Kawasaki, Japan, field calls from server and storage customers. Dell CEO Kevin Rollins yesterday sought to downplay the opportunity created for his company by the turmoil facing its top competitors.
