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Dell Sticking With Its Forecasts

Earnings: Computer maker won't cut targets for current quarter. It's a rare dose of good news in hard-hit tech sector.

April 05, 2001|From Bloomberg News

Dell Computer Corp. is standing by its revenue and profit forecasts for the current quarter, a rare dose of good news for an industry battered by the nation's economic slump and an unrelenting sell-off in technology stocks.

The company said late Wednesday that it won't reduce its targets for the three months ending May 4, which is the first quarter of Dell's fiscal year, at a meeting with analysts and media scheduled for this morning.

Dell, the top producer of desktop and laptop computers in the United States, issued a short news release saying it still expects to report about $8 billion in revenue and earnings of 17 cents a share.

However, in keeping with the prevailing economic jitters, the statement cautioned that there is still a month to go in the quarter and that the market remains unpredictable. The company declined to provide any forecasts for the balance of the year, citing "global economic and industry uncertainty."

Analysts surveyed by First Call/Thomson Financial are expecting 80 cents a share for the year.

Even so, Dell's update offered at least temporary relief from the near-daily barrage of profit warnings by major technology companies. The announcement, issued after major stock markets closed, provided an immediate boost in after-hours trading for Dell and other companies whose fortunes are directly tied to the personal computer industry.

Dell's stock had fallen $1.25 a share to $22.19 amid another grim day on the Nasdaq Stock Market, but the shares jumped to $23.88 in extended trading.

The slowing economy has caused businesses to cut back sharply on computer purchases, a major problem for Dell, which depends on corporations and other large organizations for most of its sales.

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