Dell forecasts stronger growth

Dell beat Wall Street sales and profit
forecasts, and predicted a “pick-up” in demand from corporate
customers.

The world’s number three computer maker
had revenues of $15.5bn (£10bn) in the second quarter, ahead of analysts’
estimates of $15.2bn.

Dell’s figures are closely watched, as
spending on technology is a guide to the health of corporate America.

Demand for PCs would strengthen for the
“next several” quarters as economic recovery continues, Dell said.

Brian Gladden, Dell’s chief financial
officer, said that the “corporate refresh” of old equipment is
continuing.

Dell’s largest product categories –
laptops and desktops – saw revenues jump 17% and 22% respectively.

Net profits were also ahead of forecasts
in the three months to end-July at $545m, up from $472m in the same quarter
last year.

Meanwhile, Hewlett-Packard’s net income
rose 6% to $1.77bn in the last quarter. Revenue was 11% higher at $30.7bn.

The figures were in line with the
preliminary numbers HP disclosed two weeks ago, when chief executive Mark Hurd
announced his abrupt departure.

Uncertainty

Analysts said the two sets of results
show that the technology sector is recovering. But they remain cautious.

“We expect second-half results will
be decently strong for tech, but not as strong as our prior view,” said
Collins Stewart analyst Louis Miscioscia.

Investors and analysts became nervous
about the industry’s recovery after the chief executive of Cisco Systems, John
Chambers, warned recently of “unusual uncertainty” in the global
economy.

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