TERRY KEENAN, GUEST HOST: Keep an eye on shares of Dell Computer (search) tomorrow morning. After the bell, the PC maker posted third quarter earnings. It came in at 33 cents a share.
That was right in line with estimates. But what lies ahead for Dell's bottom line? Joining us now from the company's headquarters is Dell's chief financial officer, Jim Schneider (search). And Jim, welcome. Good to have you with us.
JIM SCHNEIDER, CFO, DELL: Thank you very much.
KEENAN: I quickly perused the numbers, and almost every way you slice it, it looks like you made your quarter gross margins look to be strengthening a little bit. What was going right in the quarter?
SCHNEIDER: Well, I think it's just another great quarter for us. We again, made great progress in every customer segment and product category and geographic region. We took share everywhere, managed to improve our operating margins during the period, met our revenue targets of $12.5 billion. So I mean, things are going great for us.
KEENAN: You get most of your business from business, from your business customers. What are you seeing in terms of demand there?
SCHNEIDER: Well, demand, since about a year ago just has steadily improved. From a business market standpoint, our growth in this quarter was about 20 percent from a revenue standpoint. So we are seeing a good, consistent pickup in business overall right now.
KEENAN: And do you expect that to continue just as strongly into the beginning of next year?
SCHNEIDER: Well, Q-4 is always a great quarter to finish off from a business standpoint, but I think everything that we're seeing, we're still expecting to have really good demand going out into next year. We've given revenue guidance just for the fourth quarter alone, to take our revenue up sequentially $1 billion.
KEENAN: You produce the end product. Yet, you seem to see more strength than the companies that make a lot of the components that go into your computers. Is that because you're grabbing market share?
SCHNEIDER: Well, that's a part of it. But you must remember too that the markets actually have been a little bit more robust than people have talked about. I think expectations maybe got a bit out of hand, but we're actually in an industry right now that's seeing double digit growth from a unit standpoint, and then you layer over that our ability to take market share. It gives us unit growth then in excess of 20 percent and revenue growth of 18 percent. So the market is not bad. And we're capitalizing on it in a much greater way.
KEENAN: And I noticed your results from Europe, Middle East, Africa, up 31 percent. Asia strong too, up 25 percent. Is the weaker dollar helping you there?
SCHNEIDER: Yeah, we're seeing some. I mean, the year improvement — year-over-year has been good. What it's really done is helped to fuel the overall market. We're seeing better growth outside of the U.S., and it's in an area where it's strategic important for us to continue to expand geographically. So you're seeing growth rates in the 25-plus rates for us outside the United States.
KEENAN: Dell Computer often finds its way under the Christmas tree. The holiday season. How strong do you expect that to be?
SCHNEIDER: I think the consumer business is actually pretty good. Again, it's a matter of expectations. Last year the consumer PC business was off of the charts in the fourth quarter, so this year the comparisons maybe aren't quite as robust, but when you look at it from an overall demand standpoint, still pretty good. We had 14 percent revenue growth in our consumer business this past quarter and we're pretty optimistic about a good Q-4 as well.
KEENAN: OK, well, congratulations on what looks to be a good quarter. Thanks for joining us.
SCHNEIDER: Thank you very much.
KEENAN: Jim Schneider, the CFO at Dell.
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