Dell Profit Rises to $749 Mln as Sales Increase to $11.5 Bln
Feb. 12 (Bloomberg) -- Dell Inc., the world's second-largest personal-computer maker, said fourth-quarter profit rose to $749 million, or 29 cents a share, as demand for PCs rose and the company pared expenses.
Sales rose to $11.5 billion from $9.74 billion, the Round Rock, Texas-based company said in a statement distributed by Business Wire. Dell's per-share earnings beat analyst estimates of 28 cents, based on a survey by Thomson Financial.
The profit gain shows Chief Executive Michael Dell's push to cut costs is paying off now that demand is rising. Dell's reduced expenses have enabled the company to slice PC prices and snare market share from Hewlett-Packard Co. Dell's shipments increased about 25 percent last year, according to market research firm IDC. The company's gross margin was 18.2 percent.
``Dell is still the industry leader,'' Tim Woolston, a fund manager at Boston Advisors Inc., which owns 300,000 shares, said before the announcement.
Dell, 38, this year challenged employees to help cut annual costs by $1.5 billion, offering them bonuses and stock options as an incentive. The company now uses machines to box up computers, instead of people, saving $4 million a year. Dell saved $23,000 after one worker suggested using white paper instead of color paper on the assembly line.
The company also is saving pennies on each PC by no longer placing energy-saver rating stickers on its PCs.
Prices Drop
The average price of a PC fell to $1,151 last year, a 33 percent decline from 1999, IDC said, underscoring the need to keep cutting expenses.
Hewlett-Packard, which ranks as the world's largest PC maker when judged by revenue, yesterday said sales rose 9.1 percent to $19.5 billion. It said it will probably report net income of 30 cents or 31 cents a share when it releases final results next Thursday.
In that period, Dell reported net income of $603 million, or 23 cents a share, on revenue of $9.74 billion. In last year's first quarter, Dell had net income of $598 million, or 23 cents a share, on revenue of $9.53 billion.
Feb. 12 (Bloomberg) -- Dell Inc., the world's second-largest personal-computer maker, said fourth-quarter profit rose to $749 million, or 29 cents a share, as demand for PCs rose and the company pared expenses.
Sales rose to $11.5 billion from $9.74 billion, the Round Rock, Texas-based company said in a statement distributed by Business Wire. Dell's per-share earnings beat analyst estimates of 28 cents, based on a survey by Thomson Financial.
The profit gain shows Chief Executive Michael Dell's push to cut costs is paying off now that demand is rising. Dell's reduced expenses have enabled the company to slice PC prices and snare market share from Hewlett-Packard Co. Dell's shipments increased about 25 percent last year, according to market research firm IDC. The company's gross margin was 18.2 percent.
``Dell is still the industry leader,'' Tim Woolston, a fund manager at Boston Advisors Inc., which owns 300,000 shares, said before the announcement.
Dell, 38, this year challenged employees to help cut annual costs by $1.5 billion, offering them bonuses and stock options as an incentive. The company now uses machines to box up computers, instead of people, saving $4 million a year. Dell saved $23,000 after one worker suggested using white paper instead of color paper on the assembly line.
The company also is saving pennies on each PC by no longer placing energy-saver rating stickers on its PCs.
Prices Drop
The average price of a PC fell to $1,151 last year, a 33 percent decline from 1999, IDC said, underscoring the need to keep cutting expenses.
Hewlett-Packard, which ranks as the world's largest PC maker when judged by revenue, yesterday said sales rose 9.1 percent to $19.5 billion. It said it will probably report net income of 30 cents or 31 cents a share when it releases final results next Thursday.
In that period, Dell reported net income of $603 million, or 23 cents a share, on revenue of $9.74 billion. In last year's first quarter, Dell had net income of $598 million, or 23 cents a share, on revenue of $9.53 billion.
