Dell Reaffirms Guidance For Latest Quarter

Dell Computer on Thursday reaffirmed its financial guidance for its fiscal third quarter, saying it is winning new customers and successfully managing its operating expenses.

Dell, the No. 1 PC maker, said in mid-August that it was targeting earnings of 15 cents to 16 cents per share on revenue of $7.2 billion to $7.6 billion for the third quarter ending Nov. 2.

For the third quarter, analysts on average have expected Dell to report revenues of $7.27 billion and earnings of 15 cents per share, according to Thomson Financial/First Call.

Dell stock jumped in trading before the opening bell, rising to $22 in early trading on the Nasdaq, up from their close of $20.64 on Wednesday.

Dell, which plans to announce its results Nov. 15., cautioned that one-third of its third quarter remained. The company overtook Compaq Computer this year as the largest PC maker.

Michael Dell, the company's chairman and CEO, said in a statement the company expects to make further share gains in all product categories, customer segments and regional markets during the current quarter.

The reaffirmation from Dell came a day after the head of Internet gear maker Cisco Systems said he is comfortable with analysts' estimates for first-quarter results. The statement boosted not only Cisco's stock but the whole sector.

Investors have battered technology stocks in recent weeks amid concerns that repercussions from the attacks of Sept. 11--including shipping problems and a newborn hesitancy among some companies to upgrade computers--have shattered a fragile recovery in the already ravaged industry.

PC sales are expected to fall for the first time this year after many years of abundant growth, as a shaky economy, plunging prices, and weaker demand for electronics combined to foil what were once ambitious and nearly limitless hopes for continued growth.

Michael Dell says while conditions in the computer-systems industry remain difficult, the company's strategic, operating and financial position "is better than it's ever been."

"We're winning new customers at a rapid rate and successfully managing our operating expenses," Dell said in a statement. "Those strengths in the midst of a trying period give us great confidence for the long term."

Dell Computer also on Thursday said orders rebounded more quickly than it had expected after the Sept. 11 attacks on New York and Washington.

Dell president Kevin Rollins said there was a significant drop in demand initially, but then a rebound toward the end of that week and the following week.

"We were actually a little surprised by how fast things rebounded," Rollins said on a conference call with analysts.

He said some of that was emergency and relief orders that the company was expediting.

Rollins says by the weekend after the attacks, Dell saw fundamental demand rebound and started to gain some confidence about its fiscal third quarter.

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