Dell on course for €60bn sales target

DELL INC, the world’s second-largest personal computer maker, has said second-quarter profit rose to 24 cents a share as sales increased, while net income was $621 million in the period ended August 1.

Sales rose to $9.78 billion, making it the sixth straight quarter that Dell has exceeded revenue from the year-earlier period.

Dell founder Michael Dell said services and new products will continue to attract customers and help meet the goal of raising annual sales to $60bn from $35.4bn last year.

"Those are the kinds of things that they need for incremental business,' said Marc Klee, co-manager of the John Hancock Technology Fund, which has over 700,000 shares in Dell. "They seem to be on track to hit $60 billion, the key thing in my mind is whether they beat it ahead of time." Michael Dell, who also is Dell's chief executive, last month told shareholders he has "great confidence' that the company will meet the sales goal.

Dell's quarterly revenue has grown an average of 15% in the five quarters reported since the 38-year-old chief executive announced the five-year sales goal in April, 2002. That pace would let it reach the $60bn mark in five years, making it bigger than Boeing and Merck based on current sales.

The doubling of revenue "will happen fast to reward investors for holding the stock," said Jason Maxwell, a research director at TCW Group Inc, which manages $80bn and owns 28 million Dell shares. "There's no reason that they cannot boost their market share in all lines of their business."

Dell shares have climbed 17% this year, compared with a 24% gain in the Nasdaq Computer Index. Dell was the best performing stock in the Nasdaq 100 Index in the 1990s and reached $58.13 in March 2000.

Michael Dell says he can provide services cheaper than Sun Microsystems because he uses servers with lower-cost software from Linux or Microsoft and chips from Intel. Sun Microsystems, which makes its own chips and operating system, spends annually four times as much as Dell on research.

In the first half of this year, Dell shipped more PCs than Hewlett-Packard, which was the world's biggest PC maker, based on units shipped in 2002.