Dell reports record revenue in Q3

For the third quarter ended Nov. 1, Dell Computer Corp. reported record revenue and shipments, posting net income of $561 million, or 21 cents per share. That's up 31% from the $429 million, or 16 cents per share, the company recorded in the third quarter last year.

The computer maker reported its earnings in a statement issued after the close of financial markets in the U.S., saying it has now met or exceeded initial guidance to investors for seven consecutive quarters.

Revenue for the quarter was $9.1 billion, 22% higher than the $7.4 billion posted in the same quarter a year ago. The company generated $954 million in cash from operations in the quarter.

"The direction of customers toward standards-based computing is obvious," CEO Michael Dell said in a statement. "The reason is simple: Customers get more flexibility, performance and reliability for their money with standards than from proprietary technology."

Looking ahead, he predicted that in its fourth quarter, the company could increase shipments 10% over the quarter that just ended, or 23% higher than the Dell's fourth quarter last year. Revenue in the current quarter is expected to be up about 20% year-over-year, to nearly $9.7 billion. The company also expects fourth-quarter earnings per share of 23 cents, up 35% over last year.

Early last month, Dell had raised its third-quarter revenue forecast, citing stronger-than-expected server and storage system sales (see story). At the time, Dell predicted $9.1 billion in revenue for its third quarter and earnings per share of 21 cents -- exactly what it reported today.

Dell competes against Hewlett-Packard Co., IBM and Sun Microsystems Inc. in the server and storage markets. Although all of these companies have been hit hard by a slowdown in IT spending, Dell said it shipped a higher volume of server and storage systems than previously expected. Dell has gained market share during the economic downturn, particularly with lower-end systems.

When it reported its second-quarter earnings in August (see story), Dell reported shipping a record number of computer systems in that quarter.

Copyright © 2002 IDG Communications, Inc.

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