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Dell beats Street
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November 15, 2001: 5:40 p.m. ET
No.1 PC maker edges Wall Street's 3Q profit and revenue estimates.
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NEW YORK (CNN/Money) - Dell Computer Corp. reported third-quarter earnings Thursday that hit the high end of the company's own guidance and confirmed its outlook for the current quarter.
For the quarter ended Nov. 2 of the company's fiscal 2002, Dell (DELL: Research, Estimates) reported net income of $429 million, or 16 cents per share, compared with earnings of $674 million, or 25 cents per share, in the year-ago quarter.
Dell's third-quarter revenue fell 10 percent from the same period a year ago to $7.5 billion.
On average, analysts surveyed by research firm First Call expected the company to earn 15 cents per share with revenue of $7.3 billion.
Dell issued third-quarter guidance of 15-to-16 cents per share when it reported second-quarter earnings and affirmed that estimate in October.
Looking ahead, the company said it expects fourth-quarter earnings to be 16 cents a share, in line with First Call's current consensus number.
Dell said it expects fourth-quarter revenue to be up slightly from the third-quarter, with volume increasing about 5 percent sequentially.
For the industry as a whole, though, Dell said a combination of indicators suggest fourth-quarter revenue will be down from the third quarter, with flat product shipments.
"We feel quite comfortable with that forecast," Dell Chairman and CEO Michael Dell told CNNfn's Markets Impact. "Some in our industry have become more aggressive in their predictions and I think if they are right, Dell would benefit from that as much as any company."
For the just-completed quarter Michael Dell stressed the company's gain in market share.
"In the third quarter, the rate of separation between Dell and its competitors was more dramatic than at any time in our history," he said.
The company said combined shipments of its servers, storage products and workstations saw 20 percent growth, while shipments of notebook computers grew 18 percent.
Michael Dell said one reason for his company's gain in market share is customer uneasiness about the future of competitors Hewlett-Packard (HWP: Research, Estimates) and Compaq (CPQ: Research, Estimates).
"What we're hearing from customers is that there's a lot of concerns about product lines, who will support them, what's going to happen," he said. "A lot of customers have seen these combinations happen before with not a lot of success."
In a conference call with media analysts, the company said it is happy with its current headcount, and added the PC industry may see a recovery in mid-2002.
Shares of Dell were unchanged at $27.69 in after-hours trading. 
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