Dell boosts guidance on strong hardware sales

Dell Computer Corp. yesterday raised its third-quarter revenue forecast, citing stronger-than-expected server and storage system sales.

Dell expects to post $9.1 billion in revenue for its third quarter, ending Nov. 1, the company said in a statement. Dell, which had forecast revenue of $8.9 billion for the period, said it should report earnings per share of 21 cents. That would match the consensus estimate of analysts polled by Thomson Financial/First Call in Boston.

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.

If the company hits its $9.1 billion revenue target, it would mark a 22% year-on-year increase.

Shares of Dell closed up almost 5% yesterday at $24.64 ahead of the release of the revised forecast.

Copyright © 2002 IDG Communications, Inc.

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