Dell's 2Q Profit And Strong Outlook Boost Optimism - InformationWeek

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Hardware & Infrastructure

Dell's 2Q Profit And Strong Outlook Boost Optimism

One of I.T.'s most consistent high-performers last week added to growing optimism about the economy. Dell Inc. reported a profit of $621 million on revenue of $9.8 billion for its second quarter, ended Aug. 1. This was up from a profit of $501 million on revenue of $8.5 billion in the same quarter a year ago. Dell expects third-quarter unit sales volume to grow more than 25%.

"We're seeing a stabilization in the IT environment," Kevin Rollins, Dell's president and chief operating officer, said at the company's briefing. "However, it will take a couple of quarters before you see IT budgets growing substantially."

Dell's results could help boost a growing positive perspective on the economy. More than two thirds of 168 CIOs and CFOs responding to a survey by Tatum Partners, a professional-services company, say they expect business conditions to improve in the next two months. Forty-two percent say business has improved in the previous 30 days.

Macroeconomic numbers also are beginning to rebound, says Erik Brynjolfsson, professor of economics at the MIT Sloan School of Management. Productivity growth, in particular, has remained undiminished. "There's been skepticism about IT productivity, but now we're starting to see it show up in the macroeconomic numbers," Brynjolfsson says, "and it will show up in individual balance sheets as well."

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