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The economy may have hit a "soft patch" -- thanks for that image, Mr. Greenspan, we noticed some little while ago -- but there are always bright spots. Or perhaps we should call them "hard bits in the soft patch."
Dell met analysts' expectations for quarterly earnings, and the news drove a rally in tech stocks yesterday. (Well, a little good news out of Iraq might have contributed too.) Dell's sales were up 22% over the year-ago quarter and its income up 31%. "It's becoming boring," an analyst told the New York Times; "Dell is just killing the competition." According to theStreet.com, Dell has "more than doubled the pace at which it's gaining share" from its competitors, to about 0.7 percentage points per quarter.
The company's stock was down in after-hours trading. According to TheStreet.com, investors have so internalized Dell's clockwork-like record of growth that they sold its stock because Dell's fourth-quarter guidance was "only" in line with expectations. CBS MarketWatch theorized that the stock wasn't helped by Dell's president remarking, "There is no current sign of a strong rebound in IT spending."
Dell made its money from desktops, notebooks, and enterprise gear such as servers, according to a breakdown reported in MarketWatch. Next week the company will make its splashy entrance into the declining market for handheld computers (down 6% over the last 12 months, according to an IDC report cited by Wireless NewsFactor). Dell's two handheld models are expected to give HP and Toshiba fits because of their aggressive pricing, Wireless NewsFactor reported.
Other bright spots include -- would you believe? -- retail. Target Corp., which operates Target, Mervyn's, and Marshall Field's stores, reported quarterly profits up 50% and beat analysts' expectations for the year by 2 cents a share. AP coverage didn't speculate why the discounter did so well, but Unspun will: In tight times, people like to go to a clean, well-lighted place and buy well-designed stuff cheap.
Starbucks was another standout in the soft patch, jumping 10% in profits and 19% in sales over the year-ago quarter. Unspun particularly liked the headline the Rocky Mountain News ran over an AP story: Starbucks bean counters, indeed. The company said it aims to grow by 20% over each of the next three to five years, according to the Seattle Times. Perhaps by installing Starbucks kiosks in Dell stores. - Keith Dawson
Greenspan speaks
http://www.washtimes.com/op-ed/20021115-39772151.htm
Strong Sales Help Dell Match Analysts' Forecasts
http://www.nytimes.com/2002/11/15/technology/15DELL.html
Once Again, Dell Delivers
http://www.thestreet.com/tech/kcswanson/10054377.html
Dell shares dip despite upbeat results (CBS MarketWatch)
http://tinyurl.com/2q3w
Dell PDA To Shake Up Market
http://wirelessnewsfactor.com/perl/story/19990.html
Profits At Target Up 50% For Quarter; Gap, Dell Also Improve (AP)
http://www.ctnow.com/business/hc-earns1115.artnov15,0,7285997.story
Starbucks bean counters show 10% earnings jump (AP)
http://tinyurl.com/2q3y
Starbucks closes its year increasing profit by 19 percent (Seattle Times)
http://tinyurl.com/2q40
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