SCOTTSDALE, Ariz. – Dell Computer Corp. Chief Executive Michael Dell on Wednesday reaffirmed forecasts that fourth-quarter earnings will be unchanged from the third quarter while sales will be slightly higher.
But Dell, which has performed better than many PC makers during the current downturn, offered some signs that business could improve next year and cited a "significant pent-up demand" for both desktop and notebook computers worldwide.
Dell, who spoke at the Credit Suisse First Boston Technology Conference here, said the question remained when individuals and corporations would begin to replace their older computers.
Like many of the companies that have presented at the conference, Dell said that recovery was expected some time in 2002, but gave no specific time frame.
"We don't know when these replacements will occur but you can't push them out forever," said Dell. During the presentation, he also said the company expects to report fourth-quarter earnings of 16 cents per share, and to show revenues slightly above the third quarter's $7.5 billion.
Still, Dell's comments were more upbeat than many of the companies making presentations at the conference and the Dell keynote was better attended than most. Dell said that an estimated 30 percent of all desktop computers worldwide and 25 percent of notebooks were now at least three years old, which would eventually create demand for newer machines.
And while he said such a trend could benefit the industry across the board, he suggested that Dell Computer was poised to benefit more than most. The company has operated through this year's economic slump by slashing prices to pick up market share and said it has gained market share at the fastest pace in its history.
Still, Dell said there were a number of uncertainties in the market. While he said consumers were showing strong buying patterns as the holiday shopping season got underway, he stressed that purchases were always strong ahead of Christmas and discouraged suggestions that the uptick this year was anything out of the ordinary.
Dell also said that even when the industry does recover, PC makers might continue to suffer from a lengthening in replacement time if consumers saw less and less need to upgrade.
"I think it's possible there will be a lengthening in the replacement cycle. I wouldn't say there would be a huge lengthening however," he said.
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