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Dell reaffirms 3Q
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October 4, 2001: 10:36 a.m. ET
No. 1 PC maker says its financial position is 'better than it's ever been'
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NEW YORK (CNNfn) - Dell Computer Corp. reaffirmed its guidance for third-quarter profit Thursday, saying the efficiency of its business model has put it in a position that's "better than it's ever been."
The No. 1 maker of personal computers, repeating guidance first given in August, said it expects to earn 15 or 16 cents a share in the third quarter on revenue of $7.2 billion to $7.6 billion. Wall Street analysts expected Dell to earn 15 cents a share, according to earnings tracker First Call.
Many analysts had expected Dell to warn it would miss estimates, as No. 2 PC maker Compaq (CPQ: Research, Estimates) did Monday.
PC makers and other technology companies have suffered from a slowdown in the U.S. economy, in which businesses have stopped spending money on new technology, that's lasted more than a year.
The terrorist attacks of Sept. 11, which killed thousands of people and shut down the airline industry and much of the U.S. economy for days, was expected to disrupt production and hurt already weak demand for technology products.
But Dell, in a conference call with analysts, said production and demand rebounded more quickly than expected.
"Our supply chain stayed functional with little disruption," CEO Michael Dell said. "By Monday, Sept. 17, cargo planes were in the air with parts and completed systems to fill backlog orders. We prioritized orders for groups affected by the attacks and agencies providing relief. We provided systems and technical assistance to get them running as quickly as possible."
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Though Dell said the attacks will worsen the already grim demand environment and hurt overall industry performance, it expects to be the only PC maker gaining market share in all product categories.
"We're winning new customers at a rapid rate and successfully managing our operating expenses," Dell said in a statement released before the call. "Those strengths in the midst of a trying period give us great confidence for the long term."
Chief Operating Officer Kevin Rollins said Dell has been able to weather the severe downturn in corporate demand because it has increased its share of government and other businesses.
"Dell's business model is potent in all economic cycles," Rollins said.
Dell and Rollins pointed out there still is a month left in the company's third quarter but they were confident earnings would meet their expectations. Though they said there was "pent-up" corporate demand for products, they couldn't predict when that demand would be unleashed and offered no guidance about the fourth quarter.
Dell (DELL: Research, Estimates) shares rose on the news in early trading on the Nasdaq. 
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