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Dell stands firm on revenue outlook

Double digit growth

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Despite tough conditions for corporate IT spending, Dell said its Q1 outlook has not weakened, with revenue still expected to rise 18 per cent to USD9.5 billion.

The company is meeting analysts in New York on Thursday but held a press conference on Wednesday where it re-iterated its guidance. Dell President Kevin Rollins said the company planned to stay firm on the outlook it provided in February.

"We're seeing double-digit year-over-year revenue growth in all regional markets and customer segments," Rollins said in a statement.

Dell expects unit volumes to rise more than 25 percent from a year ago, and earnings per share are expected to jump by more than a third to USD0.23 per share.

Although the anticipated revenues represent a rise over the previous year's first quarter for Dell, they also represent a slide of some 2 percent over last quarter, and earnings per share show no growth. In the fourth quarter ended in January, Dell reported revenues of USD9.73 billion and earnings per share of USD0.23. The slide is not unexpected, as the spring quarter is typically weaker than the quarter preceding.

Rollins said on Wednesday that Dell is confident about Dell's prospects for growth, particularly because enterprise customers increasingly prefer standards-based servers based on Linux over proprietary systems. Dell said 90 percent of companies are expected to be using some kind of open-source software by 2004.

Rollins said that trend is also reaching into data storage -- Dell has strongly accelerated its sales of storage equipment following a strategic pact with industry powerhouse EMC.

Speaking to journalists at the conference, CEO Michael Dell noted that technology spending is unlikely to return to the boom years of the 1990s, but Dell should still benefit from the move to open standards and from its own low cost base.

Oracle boss Larry Ellison was also on hand at the conference, where the two companies said they would expand their strategic and sales alliance. Already the companies have a sales agreement in the US for Oracle 9i Database and Application Servers, and the deal will now be expanded to Europe and Asia.

The companies are also introducing "low-cost" server and storage clusters (starting at USD18,000) using Oracle 9i Database for both Linux and Windows, and the two companies will also work together to offer professional services to clients. © ENN

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