Dell Stands by 3Q Profit, Sales Forecasts

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Dell Computer Corp. surprised investors, the media and Wall Street when it said yesterday that it would meet third-quarter revenue and earnings forecasts.


The Austin, TX, company said in August it was targeting third-quarter earnings of 15 to 16 cents per share on revenue of $7.2 billion to $7.6 billion. Dell's third-quarter period ends Nov. 2.


Company executives cited the strength of Dell's direct business model despite economic and industry challenges but cautioned that one-third of the quarter still remained.


Founder Michael Dell went a step further and said that the company's strategic, operating and financial position was strong. Dell implied that losses by rivals like Compaq Computer Corp., Houston, and other PC makers also have helped the direct marketer.


"We're winning new customers at a rapid rate and successfully managing our operating expenses," Dell said in a statement. "Those strengths in the midst of a trying period give us great confidence for the long term."


He expects Dell to gain more market share in all product categories, customer segments and regional markets in the current quarter. Competitive pricing and falling component costs will help build share.


In a conference call Oct. 4 to analysts, Dell executives said demand was sustained by shipments to customers that switched to Microsoft Corp.'s new Windows XP operating system. The company also sold more than 35,000 computers to replace machines lost in the World Trade Center attacks.


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