The following e-mail will be sent on your behalf.

 has sent the following story to you from ElectricNews.net.

The story is available from https://electricnews.net/news.html?code=2540306

Dell reports losses but remains strong
Friday, August 17 2001
by Matthew Clark


Dell Computer Corp. released its Q2 2001 results on Thursday, recording a loss of
USD101 million in line with analysts' expectations.



Including a pre-tax charge of USD742 million for job reductions, closing some
facilities, and impairment of assets, Dell reported a net loss of USD101 million,
or USD0.04 a share, compared with a net profit of USD603 million, or USD0.22 per
share a year ago. 



Much of the USD742 million charge is the result of layoffs by the company in
recent weeks, a write-down of equity investments and its USD340 million
acquisition of ConvergeNet Technologies Inc, a data storage company. 



Excluding the charges, the Texas-based computer giant posted a second quarter
profit of USD433 million, or USD0.16 per share, in line with analysts'
predictions. Dell said its sales were USD7.61 billion, roughly flat (down one
percent) compared to the same period in 2000, and slightly behind analysts'
forecasts of USD7.71 billion. 



The company, which reported an increase in unit shipments but lowered sales, said
the competition in the industry had lowered margins, resulting in a decrease in
overall revenue. 



For the third quarter the company predicts earnings after exceptional charges of
between USD0.15 and USD0.16 a share on sales of around USD7.5 billion. 



Yet despite the trouble for the company in the quarter, it managed to gain market
share in a sector that is one of the hardest hit in the current economic
downturn. Dell's unit shipments were up 19 percent in the quarter. 



The company's sales dropped across the board from 2000 levels. In the Americas,
which represent more than 65 percent of the company's sales, revenue fell three
percent. In Europe sales rose two percent and in Asia its sales rose 15 percent.
Both Europe and Asia showed far slower growth than this time last year, when
sales soared 10 percent and 48 percent respectively.



"It remains clear that our strategy to profitably gain market share in this
slow-growth environment continues to work well," said Michael Dell, the
company's chairman and chief executive officer. "More and more customers want
industry-standard computing products and services, including at the enterprise
level, and we're delivering them with greater value." 



He added, "We increased shipments strongly in a down market, particularly in
enterprise products; gained more than two points of overall market share; and
turned in solid, stable operating results. Most importantly, we're positioning
ourselves exceptionally well for improvement in industry demand. History shows
that when Dell wins new customers, they typically stay with us." 



Dell is one of the largest single high-tech employers in Ireland, employing
around 4,875 people, including 3,800 at its Limerick facility and around 1,075 in
its Bray facility in County Wicklow. In June the company announced a second
voluntary separation programme for 275 staff in Ireland and the UK. At the time
the company anticipated 125 cuts from Dell's operations in Bray, with the
remainder of the cuts coming in the UK. 



Those cuts followed 200 administrative job losses from its facility in Limerick
in May. So far Dell has announced it would cut between 4,700 and 5,700 jobs in
its operations by the end of the year. But in Thursday's results Dell indicated
that no further cuts would be made beyond those already announced.



In April the company was ranked number one in PC sales by research firm Gartner,
and its sales in Q1 of 2001 accounted for more than 95 percent of overall growth
in global industry unit shipments. Analysts have estimated that the company's
volumes rose nearly ten times faster than the combined industry rate, as Dell's
market share increased by almost three percent since Q4 2000.