Dell profits boosted in wake of HP-Compaq merger

By Alun Williams

Posted on 15 Nov 2002 at 16:32

Dell has revealed its third quarter financial results and the figures read well for the Texan computer manufacturer. Despite tough times for the IT industry, it has prospered in the desktop and server market.

Dell, of course, specialises in built-to order machines sold through direct sales.

The company records a 31 per cent increase in profit from the previous three months. Year on year, Dell has increased net income by 15 per cent. Sales amounted to $9.14bn for the three months ending 1 November 2002.

Dell believes it has easily outperformed the rest of the computer market. In total product shipments, an increase of 28 per cent (year on year) outperforms the market's two per cent increase. For server sales in particular, Dell claims that its 24 per cent increase outperforms the market by a factor of five.

'The direction of customers toward standards-based computing is obvious,' said Michael Dell, the company CEO and chairman, referring to built-to-order components. 'The reason is simple: customers get more flexibility, performance and reliability for their money with standards than from proprietary technology.'

Looking forward, Michael Dell expects shipments to increase 10 per cent in the next quarter and revenue to be nearly $9.7bn, 20 per cent higher than for the same period a year ago.

Part of Dell's success in the enterprise market might well be a knock on effect of the HP/Compaq merger. Dell's Pierre Vigna, Director of Desktops EMEA, certainly thinks so.

He told us in a recent interview: 'It clearly opens opportunities for us. Typically, large accounts want two suppliers, in case things don't go well. This is a classic strategy. Well, they had HP and Compaq, and now they only have one vendor, so this opens the door for another vendor. We can come and say 'What about having a second supplier?'. It might be IBM, it might be Dell...'