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Dell Q3 Profit Rebounds

11/16/2001 08:56:00 AM Eastern

Austin, Texas - Bouncing back from a $100 million net loss in its fiscal second quarter of this year, Dell Computer posted net income of $429 million in its third quarter.

However, this income number is 36 percent below the $674 million in net income recorded in the third quarter of 2000.

Reflecting an ongoing personal computer price war as well as a cooling economy and softening demand, Dell revenue in the third quarter dropped 10 percent, to $7.5 billion, down from $8.3 billion in the year-ago three months.

'In every part of the world, our highest growth rates were in enterprise products and portable computers,' said Michael Dell, chairman/CEO. Desktops still remain Dell's top seller, accounting for 52 percent of total revenue in the three months ending Nov. 2. The Americas accounted for 70 percent of company revenue in the period.

Looking at the fourth quarter, Dell said a combination of indicators suggests industry revenue will be down from the third quarter, with product shipments flat. The company expects its own fourth-quarter volumes to increase roughly 5 percent sequentially, with revenue up slightly. Dell anticipates stable profit margin in the fourth quarter.

Gross margin percentage increased 10 basis points in the third quarter, hitting 17.6 percent sequentially. However, the percentage dropped 370 basis points from the 21.3 percent gross margin registered in the third quarter of 2000.

Selling, general and administrative costs (SG&A) rose 10 basis points sequentially in the third quarter, to 8.9 percent. However, SG&A was 100 basis points better than the 9.9 percent registered in the third quarter of last year.

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