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Dell remains optimistic for Q4

The computer market has been through a very tough year with consumers and businesses simply not buying due to the poor economy. This has led to some heavy losses for some in the computer industry. The economy is slowing starting to come back and the launch of Windows 7 is expected to drive some upgrades in the 2010.

The CPU market grew by 23% showing that computers were shipping in larger numbers in Q3 2009. The same quarter, Acer was able to kick Dell out of the second place spot in the top global PC shippers list. Dell announced its Q3 financials and outlook for Q4 this week and while trying to be upbeat, the Q3 numbers were not great compared to 2008.

EWeek reports that Dell saw its profits drop 54% for the quarter compared to 2008. Net income for the quarter was $337 million; net income in Q3 2008 was much higher at $727 million. Despite plummeting revenue, Dell is upbeat for Q4.

Dell CFO Brian Gladden said that the quarterly results were "showing some encouraging signs for us, especially in our large enterprise and SMB businesses, where we had sequential growth for the first time in seven quarters."

Things look better on a per category basis for Dell with its large enterprise revenue growing 4% compared to Q2 to $3.4 billion. Revenue from small and mid-size businesses was $3 billion, up 5% from the previous quarter, but down 10% from the same quarter in 2008.

Dell is looking forward to continued growth in Q4 in part thanks to expected consumer upgrades from the launch of Windows 7. Gladden said, "We built more backlog than normal due to [Windows 7's] late-quarter release, and the order dynamics that we saw during the end of October."

Dell is still continuing its aggressive cost cutting measures, which so far have included layoffs and plant closures. These cost cutting methods are likely to be leveraged next year with very aggressive pricing on enterprise PCs and servers to allow dell to aggressively gain market share according to analysts.

Technology Business Research analyst John Spooner said, "Despite lackluster business PC and server unit sales numbers in its 3Q09, TBR expects Dell to leverage its recent cost cuts … to fund aggressive PC and server pricing during the expected corporate PC upgrade cycle in 2010. We believe Dell has been laying the groundwork for this move for some time. In fact, it will leverage its lower costs to provide aggressive hardware pricing to large enterprise customers in order to win in large bid situations. At the same time, Dell will gain the opportunity to attach additional items, including its storage and newly acquired Dell/Perot Systems services, with large PC and server deployments."

The cost savings measures are expected to allow Dell to reduce the costs of its products enough that it can win large bid contracts that it can then turn around and bundle with services such as those provided by the Perot Systems company that it acquired in September.



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RE: Heres an astonishing idea
By Gio6518 on 11/21/2009 2:28:04 PM , Rating: 2
quote:
if labor is cheaper overseas then companies are going to flock there to stay competitive - as they should.


that is about the biggest reason why this country is falling apart. go ahead keep cutting jobs and send them overseas, then when they arent selling their product, from people being unemployed or underemployed (not making a decent wage)they complain the economy is bad, well that exact mentality is whats creating the poor economy...if you pay people a fair wage (more than they need just to survive barely) they will go out and spend money on new product, and services. Where else are they capable to sell their product in China or India where they make $10 a day they cant afford extra non essential goods. Americans are one of the largest group of consumers out there, along with Japan, and that corporate greed that you seem so proudly to endorse has destroyed first the people now its finally catching up to the corporations.....

and as far as them making claims that the economy is picking up due to the fact that the DOW is again over 10k, is its going to be temporary, company stocks are rising due to the reduction in work force and hasn't caught up to them yet, (Again less people working = less people spending) and the stock market WILL start to decline again after the first of the year.

best way to repair this economy is either to shut down the borders or raise import taxes and also force international companies that want to sell their products in america it must be manufactured in America !


RE: Heres an astonishing idea
By WackyDan on 11/21/2009 7:06:55 PM , Rating: 3
Well... Go ahead and force all companies to manufacture here and have call centers here for all customers. Know what happens then? You end up paying $100's more for you beloved PC that you are typing on right now. - among other products.

Before you think that all jobs are being sent overseas... I work for a Chinese company that has about 2500 of us working in the US and Canada. They've made a significant investment here, and my salary indeed gets taxed by the US gov't, my state gov't, etc.


RE: Heres an astonishing idea
By Gio6518 on 11/22/2009 10:35:32 AM , Rating: 2
quote:
I work for a Chinese company


sounds like your trying to protect your personal intrests

quote:
Well... Go ahead and force all companies to manufacture here and have call centers here for all customers. Know what happens then? You end up paying $100's more for you beloved PC that you are typing on right now. - among other products


ive been around long enough to see the devestation the outsourcing has done to our country. Once pretty much everything was made here and we had to pay for American made product, and had no problem doing so and our country flourished.

and as far as lowering priced all i can say is BULL, ive seen companies using american labor lets say call centers and outsource their work, those companies never lowered their prices, they showed more profit and gave gave themselves outrageous raises, and a hearty pat on the back, Levi jeans once made in America, now outsourced price remained exactly the same, and i can go on and on rattling off company after company, all day your viewpont is based on company propaganda.

When we started outsourcing, the product we recieved back is substandard and even sometimes toxic.

go to home depot, grocery stores etc.
they cant outsource the cashier jobs, so they replace them by self checkout, do you get a discount for using those lanes HELL NO, the comapny just profits more, just the same as outsourcing has done for ALL companies


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