Dell President: No Business Uptick

ByBridgeNews Dell Computer Corp. says the release of Microsoft's Windows XP operating system should be a catalyst for recovery in the personal computer market later this year. However, the Round Rock, Texas-based PC maker still doesn't see much hope for the second and third quarters. Kevin B. Rollins, president and COO of Dell, says he believes productivity drivers such as the new Windows software, Intel's Pentium 4 microprocessor, high-speed broadband Internet access, and wireless connectivity will help fuel the market's recovery. In addition, Rollins says the replacement cycle should help act as a catalyst, but not until the second quarter of 2002. The outlook for the next two quarters is less positive, though. "We don't see any sign that we'll see in Q2 any uptick -- or for that matter, in Q3," says Rollins. In the first quarter of fiscal 2002, which ended in April, Dell reported earnings of 17 cents per share. According to the consensus estimates from First Call/Thomson Financial, Dell is expected to earn 16 cents per share in the July quarter, 17 cents per share in the third fiscal quarter, and 19 cents per share when it ends its fiscal year in January. According to First Call, Dell's revenues are expected to slide to $7.68 billion in the current quarter, from the April quarter's $8.03 billion. Rollins says the company is focused on growth in overseas areas where Dell has only about 6% market share. He pointed out that Dell's business in Europe grew faster and had better gross margins than it did in the United States in the previous quarter.