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Dell sales rocket in titanic year

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1998 has been a bloody year for PC manufacturers. Inventory overhang, margin pressure, plummeting prices, the Asian contagion, has ensured a nasty time is being had by almost all. the outstanding exception is of course, Dell, the Austin-Texas direct PC manufacturer, which turned in an superb set of Q2 results yesterday. By its own calculations the company accounted for half of all the growth in PC unit shipments worldwide during Q2, growing at more than six times the industry rate. Almost as impressive, it managed to hold gross margins steady, edging up slightly from 22.2 per cent last year to 22.7 this time around. PC sales were up 54 per cent, well above Wall Street expectations. European revenues rose 73 per cent – over three times that in the industry in general. The company also managed to increase its revenues in Asia by 34 per cent, at a time when many other manufacturers are blaming the region’s troubles for poor results. Dell attributed its prosperity in the territory to its direct sales model. Revenue for the three months to August 2 stood at $4.3 billion , up from $2.8 billion a year ago. Net income was $$346 million, up from $214 million in the same period last year. The Texas based computer manufacturer achieved a 72 per cent increase in earnings for the second fiscal quarter. The company said that sales via its Web site were averaging $6 million per day. Joanne Gray, UK Internet manager said that the web site was composed of a mix of new and incremental business. She said that for Dell’s larger customers, the web sales vehicle was all about simplifying the ordering process. On the back of the results, Dell announced plans for a two-for-one stock split, its second this year.

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