X
Business

Dell cruises through fourth quarter

Dell Computer Corp. easily beat analysts' expectations for its fourth quarter, boosting sales by more than $1 billion and posting positive figures even in the hard-hit Asia-Pacific region.
Written by Margaret Kane, Contributor

Dell Computer Corp. easily beat analysts' expectations for its fourth quarter, boosting sales by more than $1 billion and posting positive figures even in the hard-hit Asia-Pacific region.

The Austin, Texas-based company, which started selling computer products over the Internet 1 1/2 years ago, made the disclosure Wednesday afternoon in conjunction with the release of its strong fourth-quarter earnings. Investors were delighted with the news, sending the stock to its http://www.zdii.com/industry_list.asp?mode=news&doc_id=ZE200695 52-week high Thursday morning. In December, Dell (DELL) said its Web site was registering about $3 million in daily sales.

Although a First Call survey of analysts resulted in expected earnings of 76 cents per share, the so-called "whisper number" on Wall Street was closer to 80 cents per share.

CEO Michael Dell said he expects a "healthy industry in the year ahead," including further consolidation of the PC industry. During the past year, Dell solidified its place among the top five PC makers at home and abroad.

"Major demand-drivers, including processor transitions and component cost reductions, remain solid, and consolidation is separating top companies such as Dell from the rest of the field," Dell officials said in a release. "The move to [Intel Corp.'s] Pentium II processor to run modern business and consumer applications and the latest Microsoft [Corp.] operating systems, including Windows NT and Windows 98, is already well under way. Dell is well positioned for this transition."

By the end of fiscal 1998, Pentium II systems accounted for almost 90 percent of the company's Dimension desktop revenues and 70 percent of its OptiPlex desktop revenues, officials said.

Although the Asia-Pacific region has given some PC makers trouble due to recent economic upheavals, Dell officials said it was the company's strongest growing region, with revenues rising 79 percent to $240 million. European revenues rose 61 percent to $1 billion, while the Americas region saw revenues rise 51 percent to $2.5 billion.

The company reported an operating margin of 10.6 percent and said inventory levels had dropped to seven days.

Its Internet business saw continued growth during the quarter, and is now generating $4 million in sales per day. Also doing well were the company's notebook sales, which saw a 74 percent rise in revenues to $2.2 billion.

Editorial standards