Dell Seeing Demand Stabilization in PC Market
Dell recently said that year-over-year demand for its information-technology products appears to have stabilized, and that it expects to report a slight sequential revenue increase in its fiscal second-quarter 2010, which ends July 31. The company also anticipates a modest decline in Q2 gross margins, the result of higher component costs, a competitive pricing environment, and an unfavorable mix of product and business-segment demand.
Speaking in advance of a Tuesday meeting in Austin with securities and industry analysts, Brian Gladden, the companys chief financial officer, said that while demand for Dells products and services seems to have stabilized, it varies significantly by customer segment and geography. The company stated that, over a longer time horizon, it will be targeting 5 to 7 percent compounded annual sales growth, operating income at or above 7 percent of revenue, and cash flow from operations exceeding net income. However, such results are dependent on broad global economic improvement accompanied by higher worldwide IT spending, including a sustained double-digit growth rate in demand for computer systems.
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