PC Makers Stand by Their Outlooks
Jun 12, 2003
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Big personal computer makers seem so far to have dodged any financial shocks from the SARS virus, which has killed about 700 people worldwide and hurt sales at companies ranging from cell phone makers to airlines. Dell Computer Corp., the world's largest personal computer maker, backed its fiscal second-quarter growth outlook, despite the impact of SARS on the technology market in China. Dell's rival Gateway Inc., also backed its prior financial forecasts at a recent Bear Stearns technology conference. "It has impacted China to some extent," Dell Chief Operating Officer Kevin Rollins said. "For Dell that represents about 3 percent of our sales. So it's not significant for us in the main." "The SARS impact as I see it was factored into the guidance we gave for the company.” SARS, or severe acute respiratory syndrome, has hurt companies with customers or operations in China, which been the hardest hit by the virus. Dell has sidestepped the brunt of the technology downturn of the past 3 years by taking market share from rivals. The Round Rock, TX, U.S.-based company has expanded into new markets for business computers, storage machines and even printers. In May, Dell forecast second-quarter sales would rise 15 percent from a year earlier to more than U.S. $9.7 billion, with earnings up to 24 cents a share from $0.19 a year ago. Mr. Rollins also said in May that Dell had not seen a pick up in demand. Analysts have been looking closely for any news of a change as technology stocks continue to move higher despite conflicting signs about growing inventories of microchips. Micron Technology Inc. said that production growth was a little better than expected. Integrated Circuits Systems Inc., which makes silicon timing devices, indicated that demand for motherboards -- a PC component -- had returned to seasonal trends after a glut. "Motherboards appear to be forming a bottom. I wouldn't go as far as to say there was a pickup in demand, but we're at a point where we may see a resumption in component demand," said Bear Stearns analyst Brian Wu. (Reuters)

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