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News > Technology
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Dell ups 2Q revenue, profit target
Computer maker's upside surprise sends its shares soaring in extended-hours trade.
July 11, 2002: 6:06 PM EDT

NEW YORK (CNN/Money) - Dell Computer Corp. said Thursday it expects second-quarter sales and earnings to come in stronger than it forecast just two months ago, prompting a surge in its stock in after-hours trading.

After the closing bell, Dell said it believes second-quarter sales will reach $8.3 billion, up about 9 percent from last year's second quarter, producing earnings of 19 cents a share, an increase of 19 percent excluding a special charge a year earlier. With the charge, Dell reported a loss of 4 cents a share in the year-ago quarter.

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On May 16, Dell had forecast revenue for its second quarter, which ends on Aug. 2, of $8.2 billion and earnings of 18 cents a share.

Dell (DELL: Research, Estimates) shares soared $1.74 to $25.41 on the Instinet extended-hours trading system after rising 26 cents during the regular session.

Dell, like most other technology companies, is still being affected by the drop-off in corporate technology spending, and it's still waiting for the rebound.

But the company, which derives the bulk of its revenue from PC sales and the remainder from other products, such as data-storage systems, and networking hardware, such as servers and switches, has stood out among its competitors as one of the few to actually gain share in its core markets.

Dell executives already had raised the bar for the fiscal second quarter when they reported first-quarter results on May 16. At that time, they said gains in market share, particularly in servers, and reduced costs made them more optimistic about the quarter.

In a brief statement Thursday, Dell said it believes it is continuing to gain market share amid weak overall demand.

The company also said the strength in the current quarter is broadly based, highlighted by growth in the U.S. education, government and consumer business segments.

Dell said it expects its operating profit as a percentage of revenue to be up sharply from the most-recent and year-ago quarters. The company plans to announce its second-quarter results and provide third-quarter forecasts on Aug. 15.  Top of page






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