Dell Computer Corp. proved the efficacy of its direct marketing model once again this week when it reported second-quarter results that beat analysts' expectations by 4 cents a share.
On the heels of industry reports that indicate Dell is in a virtual tie with Compaq as the top U.S. PC vendor, the Round Rock, TX, direct seller posted second-quarter earnings of 50 cents per share, beating market estimates of 46 cents and topping earnings from the same period a year ago by 72 percent. Net income was up 62 percent to $346 million while revenue increased 54 percent to $4.3 billion.
Dell rewarded shareholders by announcing a 2-for-1 stock split, its sixth in six years, that will take place Sept. 4 and is payable to shareholders of record on Aug. 28.
“Our sustained growth and solid performance across all segments and regions continue to underscore the strength and efficiencies of our direct business model,” chairman and CEO Michael Dell said in a prepared statement. “We believe that our performance positions us as No. 1 in profitability, revenue growth and unit growth among major systems companies worldwide.''
In the turbulent Asian region, Dell saw revenue grow 34 percent for the quarter to $280 million despite a 9 percent drop in unit shipments. For the first six months of the fiscal year, it reported net income of $650 million, or 93 cents per share, on revenue of $8.2 billion.