RealTime IT News

Dell Lifts Q2 Guidance

Citing strong enterprise sales, Dell said earnings per share for the second quarter would be 31 cents, up 2 cents from original estimates and 29 percent from the same quarter a year ago.

The company raised its guidance at its stockholders meeting, where it anointed President Kevin Rollins as CEO Friday. Rollins is filling the position of company founder Michael Dell, who will become chairman of the board. Dell had been CEO for 20 years, since the company's inception.

While raising guidance, Rollins said Dell still expects second-quarter revenue of $11.7 billion on strong enterprise systems and services sales, including shipments to U.S. small- and medium-business customers. Dell is the No. 2 seller of Intel-based servers, according to IDC.

Sales outside the United States were particularly strong, as well. Moreover, early analyst estimates indicate Dell's overall global market share in the second quarter increased to more than 18 percent, a full point greater from the same period a year ago.

In February Dell reported a net income of $2.6 billion, or $1.01 per share, on revenue of $41 billion for the fiscal year 2004.

Dell, which credits its direct sale model and "build to order" approach for its success at a time when other vendors struggled, will issue complete second-quarter results Aug. 12.

While enterprise sales buoyed Dell's performance, the company also extended its leadership position in PC shipments. Gartner said in preliminary second-quarter figures that Dell posted double digit growth in all regions and led all vendors with a 16.5 percent market share.

That figure is 2.2 percentage points higher than the nearest competitor HP and a 22.5 percent increase from the same period last year. Dell continued its lead in the United States, as well, posting a market share of 29.5 percent, a growth of 16.1 percent in the year-over-year quarter.

Overall, worldwide PC shipments topped 43 million, a 13.3 percent increase over the same period last year. The figure was powered by sales of replacement computers, Gartner said.

In introducing Rollins as CEO, Dell said during the shareholders meeting that he doesn't expect much to change, because the two leaders have essentially driven Dell to success together for the last several years. Rollins was also elected to the company's board of directors.