Disappointing earnings contributed to a downbeat for tech stocks Friday.
Dell Computer Corp. shares fell about 10 percent in early trade Friday after the world's No. 2 personal computer maker said its second-quarter revenues came in slightly below projections, although profits beat analysts' estimates. Its shares were last off 4-1/4 to 37-1/2 on the Nasdaq.
After Thursday's close, the Round Rock, Texas, firm said it earned $603 million, or 22 cents a share, up from $507 million, or 19 cents, a year earlier. Wall Street analysts on average had expected Dell to post a profit of 21 cents, according to First Call/Thomson Financial.
Revenue rose 25 percent to $7.7 billion, compared with earlier projections of 30 percent and a historical range of more than 50 percent.
The company said it still expected to reach its revenue growth target of 30 percent for the year. It attributed the revenue shortfall to weak European government spending.
Donaldson Lufkin & Jenrette analyst Kevin McCarthy said in a note he cut his fiscal 2001 revenue estimate modestly but kept earnings estimates unchanged. The firm expects Dell's stock to stay in its recent $38-58 trading range as it transitions into becoming an enterprise supplier, which most analysts see as the company's most important long-term area of opportunity.
He said Dell's revenues remain highly dependent on commercial desktop unit shipments in the United States. The move to an Internet computing model is slowing the commercial desktop-unit market, which is the source of about half of Dell's revenues.
----
Profits Slide for Net Holding Co.: Internet holding company Safeguard Scientifics Inc. said profits in the second quarter fell 81 percent from the same period a year ago, although revenues from partner companies rose 30 percent.
The company earned $2.2 million, or 2 cents a share, in the second quarter, versus $11.5 million, or 11 cents a share, in the same quarter a year earlier. During the period, Safeguard acquired several startup companies that have not yet generated revenues.
As a holding company, it makes money bringing startups to the public market, and buying and selling stakes in other companies. Safeguard, which focuses on communications and electronic services companies, said its partners had total revenues of $1.2 billion in the second quarter, up 30 percent from the year-ago period.
Safeguard had direct ownership interests in 49 partner companies and indirect investments in an extended network of about 300 partner companies, including Internet Capital Group Inc., another Internet holding company with stakes in 77 companies.
