- Nov 11, 2004
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http://biz.yahoo.com/ap/060518/earns_dell.html?.v=6
http://www.engadget.com/2006/05/18/dell-goes-amd-in-servers-at-least/
Dell to Use AMD Microprocessors; Shares Up
Thursday May 18, 8:40 pm ET
By Matt Slagle, AP Technology Writer
Dell to Start Using AMD Microprocessors in Some High-End Servers; Shares Climb 3.4 Percent
DALLAS (AP) -- Dell Inc. said Thursday it will start using microprocessors from Advanced Micro Devices Inc. in some of its high-end servers, sending shares of the world's largest PC maker higher Thursday even as it reported an 18 percent drop in quarterly profit.
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Dell CEO Kevin Rollins said AMD's Opteron Dual-Core processors will be offered in Dell's multiprocessor servers by year's end for the first time. Previously, Dell relied exclusively on chips from AMD's larger rival, Intel Corp.
"It's a fairly small category in terms of units," Rollins said. "We will still be launching this year a broad line of Intel products. We think we've got a winning combination of bringing great technology to all customers."
Rumors about Dell's adoption of AMD chips have been circulating for months, and some analysts have suggested that the company's Intel-only policy was hurting business.
The deal also is a major win for AMD, which had little presence in the server market until it released its Opteron processor in 2003. The critically acclaimed chip put Intel in the rare position of having to play catch-up with its smaller rival.
In March, Dell began offering AMD chips through its acquisition of Alienware Corp., which makes high-end PCs for gamers. The Miami company operates as a wholly owned subsidiary of Dell.
"They're offering these chips where people are asking for it: in servers and high end gaming systems," said Frank Gillett, principal analyst with Forrester Research Inc. "It's not clear that they will feel compelled to offer AMD elsewhere unless people start asking for it by name."
In extended-session trading, shares of Dell rose 82 cents, or 3.4 percent, to $24.77 and AMD stock jumped $3.93, or nearly 13 percent, to $35.28 after Dell disclosed the deal as part of its first-quarter earnings report. Intel shed 92 cents, or nearly 5 percent, to $17.73.
The AMD announcement overshadowed Dell's results, which missed Wall Street's expectations. The company has been struggling amid tough competition from rivals such as Hewlett-Packard Co.
Round Rock-based Dell earned $762 million, or 33 cents per share in the three months ended May 5, compared to $934 million, or 37 cents per share, in the year ago period. That included a charge of $77 million, or 3 cents a share, for the expensing of stock options.
First-quarter sales rose 6 percent from the year ago period to $14.2 billion. It had previously forecast revenue of $14.2 billion to $14.6 billion.
Analysts were expecting 38 cents per share on revenue of $14.5 billion, according to a survey by Thomson Financial.
Last week, Dell lowered its earnings projections for the quarter to 36 cents to 38 cents per share because of what it called "pricing issues."
"The competitive environment has been more intense than we had planned for or understood," Rollins said. "Over the last year, we tried to achieve both growth and increased levels of profitability, which allowed our competitors to improve their relatively low levels of profitability and accelerate their growth."
Dell grew into a Wall Street darling selling computers directly to businesses and consumers. Last month, two technology research firms reported that Dell's PC sales were growing more slowly than competitors.
IDC Research Inc. and Gartner Inc. said Dell's January-March shipments grew about 10 percent, but industrywide sales rose 13 percent and main rival HP gained 22 percent.
Stamford, Conn.-based Gartner said Dell saw its share of industry computer shipments decline to 16.5 percent in the first quarter of 2006 from 16.9 percent a year ago. Though Dell shipped 10.2 percent more PCs than it did in last year's first quarter, Gartner said the growth rate was Dell's slowest since the third quarter of 2001.
Desktop PCs account for about 40 percent of Dell's revenue.
Company executives promised an aggressive strategy to regain its footing by focusing on three areas: new products, additional savings and a plan that will pump more than $100 million to boost customer service efforts.
"The growth associated with these initiatives will not be accomplished in just one or two quarters," Rollins said. "We are positioning the company for the next three to five years and beyond."
Some analysts said Dell will have to continue to sacrifice profits to regain market share.
"They underestimated how competitive the market is," said Nick Nilarp, analyst at Fitch Ratings. "Dell can no longer win on price, they have to win on customer service. I think they've recognized this. Clearly Dell is still growing and they will not stand still."
In Thursday's report, Dell said it would no longer issue quarterly guidance and earnings per share and would instead only focus on long-term specific company and industry factors influencing performance.
However, Dell said it expected results for the second quarter to be similar to the first quarter.
The results were announced after the close of regular trading. Dell shares rose 32 cents to close at $23.95 on the Nasdaq Stock Market. Dell shares have ranged from $23.60 to $41.99 in the past 52 weeks. AMD shares, meanwhile, rose 58 cents to $31.35 in the regular session on the New York Stock Exchange.
http://www.engadget.com/2006/05/18/dell-goes-amd-in-servers-at-least/
Dell to Use AMD Microprocessors; Shares Up
Thursday May 18, 8:40 pm ET
By Matt Slagle, AP Technology Writer
Dell to Start Using AMD Microprocessors in Some High-End Servers; Shares Climb 3.4 Percent
DALLAS (AP) -- Dell Inc. said Thursday it will start using microprocessors from Advanced Micro Devices Inc. in some of its high-end servers, sending shares of the world's largest PC maker higher Thursday even as it reported an 18 percent drop in quarterly profit.
ADVERTISEMENT
click here
Dell CEO Kevin Rollins said AMD's Opteron Dual-Core processors will be offered in Dell's multiprocessor servers by year's end for the first time. Previously, Dell relied exclusively on chips from AMD's larger rival, Intel Corp.
"It's a fairly small category in terms of units," Rollins said. "We will still be launching this year a broad line of Intel products. We think we've got a winning combination of bringing great technology to all customers."
Rumors about Dell's adoption of AMD chips have been circulating for months, and some analysts have suggested that the company's Intel-only policy was hurting business.
The deal also is a major win for AMD, which had little presence in the server market until it released its Opteron processor in 2003. The critically acclaimed chip put Intel in the rare position of having to play catch-up with its smaller rival.
In March, Dell began offering AMD chips through its acquisition of Alienware Corp., which makes high-end PCs for gamers. The Miami company operates as a wholly owned subsidiary of Dell.
"They're offering these chips where people are asking for it: in servers and high end gaming systems," said Frank Gillett, principal analyst with Forrester Research Inc. "It's not clear that they will feel compelled to offer AMD elsewhere unless people start asking for it by name."
In extended-session trading, shares of Dell rose 82 cents, or 3.4 percent, to $24.77 and AMD stock jumped $3.93, or nearly 13 percent, to $35.28 after Dell disclosed the deal as part of its first-quarter earnings report. Intel shed 92 cents, or nearly 5 percent, to $17.73.
The AMD announcement overshadowed Dell's results, which missed Wall Street's expectations. The company has been struggling amid tough competition from rivals such as Hewlett-Packard Co.
Round Rock-based Dell earned $762 million, or 33 cents per share in the three months ended May 5, compared to $934 million, or 37 cents per share, in the year ago period. That included a charge of $77 million, or 3 cents a share, for the expensing of stock options.
First-quarter sales rose 6 percent from the year ago period to $14.2 billion. It had previously forecast revenue of $14.2 billion to $14.6 billion.
Analysts were expecting 38 cents per share on revenue of $14.5 billion, according to a survey by Thomson Financial.
Last week, Dell lowered its earnings projections for the quarter to 36 cents to 38 cents per share because of what it called "pricing issues."
"The competitive environment has been more intense than we had planned for or understood," Rollins said. "Over the last year, we tried to achieve both growth and increased levels of profitability, which allowed our competitors to improve their relatively low levels of profitability and accelerate their growth."
Dell grew into a Wall Street darling selling computers directly to businesses and consumers. Last month, two technology research firms reported that Dell's PC sales were growing more slowly than competitors.
IDC Research Inc. and Gartner Inc. said Dell's January-March shipments grew about 10 percent, but industrywide sales rose 13 percent and main rival HP gained 22 percent.
Stamford, Conn.-based Gartner said Dell saw its share of industry computer shipments decline to 16.5 percent in the first quarter of 2006 from 16.9 percent a year ago. Though Dell shipped 10.2 percent more PCs than it did in last year's first quarter, Gartner said the growth rate was Dell's slowest since the third quarter of 2001.
Desktop PCs account for about 40 percent of Dell's revenue.
Company executives promised an aggressive strategy to regain its footing by focusing on three areas: new products, additional savings and a plan that will pump more than $100 million to boost customer service efforts.
"The growth associated with these initiatives will not be accomplished in just one or two quarters," Rollins said. "We are positioning the company for the next three to five years and beyond."
Some analysts said Dell will have to continue to sacrifice profits to regain market share.
"They underestimated how competitive the market is," said Nick Nilarp, analyst at Fitch Ratings. "Dell can no longer win on price, they have to win on customer service. I think they've recognized this. Clearly Dell is still growing and they will not stand still."
In Thursday's report, Dell said it would no longer issue quarterly guidance and earnings per share and would instead only focus on long-term specific company and industry factors influencing performance.
However, Dell said it expected results for the second quarter to be similar to the first quarter.
The results were announced after the close of regular trading. Dell shares rose 32 cents to close at $23.95 on the Nasdaq Stock Market. Dell shares have ranged from $23.60 to $41.99 in the past 52 weeks. AMD shares, meanwhile, rose 58 cents to $31.35 in the regular session on the New York Stock Exchange.
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