Dell sees demand on track, Windows 2000 heating up

New York: Dell Computer Corp.'s chief financial officer on Thursday said

demand for its computer products remained healthy, and that he sees second

quarter revenues growing 8 per cent over the first quarter.

"Normal seasonal patterns appear intact," Chief Financial Officer

James Schneider said in a conference call with analysts. He also suggested he

was comfortable with growth forecasts of 8 per cent for the July quarter

compared with the April quarter.

He added that he sees operating margins as a percentage of revenues growing

to about 10 per cent by the fourth quarter, and at about 9 per cent for the year

as a whole. Dell reported operating profit margin of 8.6 per cent in the first

quarter.

Executives said that the company planned to carefully control costs in order

to achieve the margin improvements, and implied that management was confident

that it could manage effectively expected higher component costs later this

year.

Dell, which has ploughed $800 million into roughly 90 firms in the data

transfer, storage, and Web business and consumer markets, expects to see higher

levels of investment gains at a rate of around $100 million per quarter,

Schneider said.

Dell, the world's No. 2 personal computer maker, sounded a confident note on

the transition the PC industry is making to Windows 2000, the latest generation

of the dominant Microsoft Corp. operating system. Schneider said the move by its

customers to Windows 2000 appeared to be on track, with momentum picking up in

the course of this year.

His comments fit with similar remarks from other business PC makers such as

Compaq Computer Corp. , International Business Machines Corp. and other PC

makers. They have said they are not seeing any signs of the slowing growth that

Microsoft recently warned would cut revenue growth to around 15 per cent in the

coming year, down from around 20 per cent previously.

(C) Reuters Limited 2000.