Dell profits up despite difficulties


Dell profits up despite difficulties
Dell reported third-quarter earnings exceeding analyst expectations yesterday, indicating that the computer manufacturer may be starting to recover from a range of problems which have threatened profits over recent months.

However, in a statement, the company warned that the interim results were "subject to change" following the outcome of current investigations by regulators into its accounting practices, which last week forced Dell to delay the publication of its results until yesterday.

Texas-based Dell said that profits for the three months to November 3rd were $677 million (£356.5 million) or 30 cents a share, compared with analyst predictions in the range of 24 cents a share.

The world's second largest computer manufacturer did not provide comparable results for 2005.

Dell's forecast-beating performance was aided by a 33 per cent increase in computer sales in China, where Dell claimed to be experiencing growth almost three times above that enjoyed by its rival competitors in the newly emerging market.

The company added that a "more balanced approach to pricing" had resulted in a nine per cent increase in revenue across Europe, the Middle East and Africa.

Dell also revealed that its decision to invest $150 million (£78.7 million) boosting customer service operations was also resulting in signs of improvement, with average hold times for US customers using Dell's call centres reduced from nine to three minutes over the past year following the recruitment of additional staff.

Referring to the future outlook for the company, Dell said that its action to improve its operating and financial performance in the long term had seen a "better balance of liquidity, profitability and growth…starting to take hold".

Nonetheless, Dell warned that current investigations by regulators into its accounts "could materially affect" its latest results, as well as those already announced for the second quarter.

The US securities and exchange commission announced last Thursday that it was launching a formal investigation into whether Dell's accounts dating back to 2002 were mis-stated, while the company revealed on Tuesday that the US attorney for the southern district of New York had also requested information about its financial reports.

The accounting probes come in the wake of a difficult period for Dell, which has struggled to fend off competition from rival Hewlett Packard and which, along with other manufacturers, was forced to recall Sony batteries used in its laptops following safety fears this summer.

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