Tech Stocks Down, Dell is Outlier


Tuesday, February 15th, 2011
News

Tech stocks have recently taken a hit in the market place. Nokia Corporation (ADR) (NYSE: NOK), Intel Corporation (Nasdaq: INTC), and Alcatel-Lucent (ADR) (NYSE: ALU), and Sprint Nextel Corporation (NYSE: S) were all down by a few percentage points today. While the broader trend of tech and energy stocks seems to be trending downward based on gloomy economic news, the one outlier is Dell Inc., which recently posted its impressive quarterly profit report. The figures in the report according to the Wall Street Journal indicate that the company’s quarterly profit almost tripled due to strong sales and reduced component costs. Shares have increased by 5 percent to $14.65 in after hour trading. The Wall Street Journal corroborates this report indicating that Dell’s PC shipments have “outstripped the growth of the overall PC market,” posting a 4 percent increase in laptop sales this past quarter.

The company’s solid figures show that the revenue has risen $15.69 billion up from $14.9 billion a year ago during the same quarter, while net income increased $927 million, up 48 cents per share, from last year at $334 million.

Chief Financial Officer Brian Gladden credits the company’s strong performance this quarter with a shift in emphasis toward higher-end products and cutting production on the less profitable products. The supply chain has also been modified toward the ends of creating better sustainability. Apart from this, Dell has also diversified its focus making inroads into businesses like storage systems and security platforms. Large business revenue has garnered the company $4.6 billion in revenue, up from $4.2 billion last year, while small businesses have risen by 12 percent to $3.7 billion. The cost of components such as LCD screens as well as memory chips have been credited for this spike in revenue for the company.

Sources:

http://www.mbpecapital.com/?p=1072

http://www.reuters.com/article/2011/02/15/markets-stocks-close-idUSWEN785620110215

http://www.businessweek.com/ap/financialnews/D9LDGS180.htm

http://online.wsj.com/article/SB10001424052748704409004576146652638431120.html

 



Article by Andrew Timm

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: 4q , dell , fourth quarter , growth , profits , revenue , tech , technology

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