Dell's Sales Get by Target
08/30/07 - 07:14 PM EDT
Alexei Oreskovic
The company earned $733 million, or 32 cents a share, vs. the $502 million, or 22 cents a share, it earned at this time last year.
The average analyst estimate called for Dell to earn 31 cents a share, according to Thomson Financial. But that figure did not factor in an expense of 3 cents that Dell incurred to pay employees for expired stock options. Excluding the cost from Dell's reported results would produce an adjusted figure of 35 cents, giving the company a 4-cent beat. During the second quarter, Dell appears to have benefited from low costs for the components used in PCs, particularly memory and microprocessors, and healthy demand for some of its new products. But manufacturing glitches may have caused Dell to leave money on the table. "During the quarter, the company ran a higher-than-normal product backlog, driven by better-than-expected demand for the new Inspiron and XPS color notebooks coupled with supply constraints for several colors, and a tightening in supply of certain flat-panel displays," Dell said in a statement. Notebook PC revenue was $3.9 billion in the second quarter, up 5% year-over-year. Desktop revenue grew 2% to $5 billion. Earlier this month, rival Hewlett-Packard(HPQ Quote - Cramer on HPQ - Stock Picks) said its quarterly notebook revenue jumped 54% year-over-year, while its desktop revenue increased 12%. "Dell's results were solid, but they weren't outstanding like what we've seen from H-P and Apple(AAPL Quote - Cramer on AAPL - Stock Picks)," says American Technology Research analyst Shaw Wu.
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