ROUND ROCK, Tex.--Dell Computer Corp. today blamed shortages of Intel Corp. microprocessors and slow sales of computers at the start of 2000 for lower-than-expected revenues and earnings in its current fiscal year, which ends Friday (Jan. 28).
Dell's announcement follows an earlier warning from Gateway Inc., which said shortages of Intel MPUs contributed to lower-than-expected results in the fourth quarter of 1999 (see Jan. 6 story).
Round Rock-based Dell said it was hurt by sporadic supplies of Intel Coppermine processors and the discontinuation of 450-MHz Pentium III chips. The PC maker had to sell systems with 500-MHz central processors at 450-MHz prices, which cut into profit margins, said a company spokesman.
Dell's revenues were also held back by a slower-than-expected rebound in PC sales to corporate and institutional customers after the start of the New Year. The Round Rock company said it expects to report revenues of about $6.7 billion for the fiscal fourth quarter, which would be 30% higher than sales last year. Dell said unit volumes are expected to be 30% higher in the fiscal quarter and 50% higher in the calendar fourth quarter from the previous year. Dell's earnings are expected to be about $430 million, or 16 cents per share vs. Wall Street's consensus of 21 cents per share.
"Our consumer and small-business unit now has significantly improved component supplies and shorter lead-times, and is achieving record days in orders and shipments," said Tom Meredith, chief financial officer at Dell. "Excellent growth and profitability in sales to small businesses are helping to fuel that rise.
"And our enterprise business continues to be strong, with sales of network servers, storage products and workstations expected to rise more than 50% in the fourth quarter from the previous year," he added.
The Dell spokesman said memory prices and availability of DRAMs were not a factor in the company's lower results. Dell will report it results on Feb. 10.