Dell Q1 sales on the up-and-up
Solid demand in Europe and Asia
Dell has announced that sales in the first quarter will beat earlier estimates, thanks mainly to higher demand in Asia and Europe. The company said its quarter sales will be $11.4bn - some $200m higher than the company predicted on 12 February. The new sales guidance also marks a 20 per cent rise over what Dell posted in the same quarter a year ago. Dell's earnings-per-share forecast was unchanged at $0.28 per share, around 22 per cent higher than it reported last year.
Kevin Rollins, Dell's president and chief operating officer, said growth in markets outside the United States helped bolster sales. "Customers around the world want powerful, reliable technology at great prices," said Rollins. "That's true in markets like China and Japan and France, and in the US, England and Canada, and why we're seeing rapid, profitable growth."
The fastest-growing business segments have been servers, storage systems and professional services, Rollins claimed, adding that Dell's new printing and imaging business has helped drive revenues.
With its update, Dell said that it would increase its share buyback scheme in the current quarter. The company said it now expects to spend about $1.1bn to repurchase its common stock during the three-month period that ends in April, up from a planned $600m at the start of the quarter.
The good news from the computer maker came just hours after Internet company Yahoo posted healthy results and a two-for-one stock split. Both announcements should help the tech sector bounce back from several disappointing announcements earlier in the week, including poor Seagate results and a profit warning from Nokia. Prudential's decision to lower its forecast for Dell rival Hewlett-Packard also dragged down high-tech stocks during the week.
More details about Dell's buyback plan and the company's expectations for the current quarter will be given during a conference call on Thursday afternoon (2pm GMT).
For nine straight quarters, Dell has seen revenues grow and in five of the past six quarters the company has met or surpassed forecasts. And the dazzling growth - much of it in the face of a major economic downturn - prompted Dell to set ambitious targets last year, including a doubling of sales to some $60bn. Analysts note that the sales target could be achieved by as soon as 2007 if Dell averages 15 per cent growth per year. In the year ending in January 2004, the company's sales came to $41.4bn.