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After forecast miss, Dell CFO looks to enterprise

Roy Harris | Feb. 23, 2012
With Dell Inc.'s missed first-quarter sales forecast this week, a development that knocked its share price down as much as 5% the next day, Dell CFO Brian Gladden has emerged with CEO Michael Dell as a second spokesman for the personal-computer company's future.

With Dell Inc.'s missed first-quarter sales forecast this week, a development that knocked its share price down as much as 5% the next day, Dell CFO Brian Gladden has emerged with CEO Michael Dell as a second spokesman for the personal-computer company's future.

The company has said that sales are being hurt by lackluster demand from consumers and government agencies. Revenue for the period ending in April now is being forecast by the Round Rock, Tex.-based company to fall 7%, to $14.9 billion. The average, calculated by Bloomberg from analyst estimates, had been $15.1 billion.

Bloomberg also has reported that the sluggish sales -- coupled with shrinking profit last quarter --- are raising analyst concerns about Dell's comeback plans, which involve a streamlining of operations to boost profit. Dell recorded almost a 25% gain last year in share price, but some investors may have been overly optimistic about the company's ability to turn around its operations, Brian Marshall, an analyst at ISI Group Inc. in San Francisco, told the news service.."

But listen to CFO Gladden: "Our full-year results are a strong reflection of the significant progress we made this year on our strategic priorities." He added: "The expanding mix of revenue and earnings from enterprise solutions and services is critical to our future." Dell noted that it is now is selling more of its own data-storage and networking gear, instead of relying on products made by such companies as EMC Corp.

Business computing demand is "pretty strong," Gladden told Bloomberg this week in an interview. Sales to large corporations rose 5% last quarter, while the unit that sells to small and midsize businesses got a 6% boost, the company said.

Customers Seeing Dell 'in Broader Terms'

CEO Dell, who retook the reins of the company in 2007, is making deals and adding new products in a bid to revive growth and focus on more profitable areas.

"Our customers think of Dell in much broader terms now, trusting us with their comprehensive IT needs, from the datacenter to the device," he said in the news release. "We are more committed than ever to both developing and investing in innovative solutions that deliver greater value and better outcomes for our customers."

He added in the conference call that Microsoft Corp.'s Windows 8 operating system, due later this year, could provide a lift to consumer PC sales. The company also will entice business customers wanting to buy tablets running Windows, he said. Until now, most tablets have run software from Apple or Google Inc. "With Windows 8, there's great excitement in the corporate space for us," the CEO said. "There's pretty strong appetite for Windows 8 tablets in the enterprise."

 

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