COMPUTER INDUSTRY Dell reports jump in 1st-quarter profits

Dell says it will continue to grow even if the market isn't expanding.
ROUND ROCK, Texas (AP) -- Dell Computer Corp., a bellwether of the technology industry, said Thursday that first-quarter profits jumped 31 percent on strong sales.
The largest personal-computer maker said it earned $598 million, or 23 cents per share, compared with $457 million, or 17 cents per share, a year earlier.
The results matched the expectation of analysts surveyed by Thomson First Call.
Revenue rose 18 percent, to $9.53 billion from $8.07 billion a year ago, roughly matching analysts' expectations.
Dell said its worldwide shipments in the quarter rose 29 percent from a year earlier while the rest of the industry experienced a 1 percent decline.
Looking ahead
Dell said second-quarter increases should also be strong, with computer sales rising 25 percent and revenue gaining 15 percent over last spring. The company said it would earn 24 cents per share, in line with analysts' forecasts.
Industry observers said the results were further evidence of Dell's ability to control costs, undercut competitors on price and do well in a stagnant technology market.
"Dell continues to be a relentless operational machine," said Barry Jaruzelski, head of technology consulting at Booz Allen Hamilton. "They continue to grind it out and take it out of the hide of the competition."
Dell reported strong sales not only in its core product -- personal computers -- but also in servers and data-storage equipment.
Jaruzelski said the weak market has played to Dell's strength -- its cost advantage. He said it was possible that Dell may be reaching a saturation point for its share of technology-equipment markets, and that a stronger market might help its competitors, "but I wouldn't hang my hat on it."
Dell said its market share grew 1.5 percent per year in the late 1990s and accelerated to 2.3 percent each of the past two years.
"Our growth really has been completely disconnected from market growth over the last 21/2 years," said chairman and chief executive Michael Dell.
The chairman said that considering the company's 17 percent share in client computer systems and relatively modest share of the server market, "We have still a long way to go, lots of opportunity to grow irrespective of what market growth is."