Dell sales fall-off in second quarter

Dell Computers, which employs 4,500 people in Limerick and 1,100 in Bray, has reported a falloff in European sales in the second quarter, compared to sales in the Americas. The Irish operation supplies the EMEA (Europe Middle East and Africa) market, but sales were up by just 10 per cent in Europe in the three months to the end of July, compared to a 27 per cent sales growth in Dell's main American markets. Overall, Dell's after-tax profit rose by 19 per cent to $603 million (€667 million) slightly ahead of analysts' expectations. The 25 per cent growth in turnover to $ 7.7 billion, compared to the same period last year, was slightly behind what analysts had expected.

But the chief executive Mr Michael Dell, said the company expected to reach its turnover growth target of 30 per cent for the year. The 10 per cent sales growth in Europe compares to a growth rate of 17 per cent in the first quarter and the growth rate of 24 per cent in the second quarter of 1999. Ms Annette Condon, a spokeswoman for Dell Ireland, said the European growth rate was slower than expected but there had been encouraging growth in the small business segment.

The overall slower growth rate was an indication of how the market was developing. "We are still continuing to grow in relation to the overall market," she said. She added that the Irish market share had grown to 29.7 per cent, consolidating its number one position as a PC seller in the State. In Europe, Dell's competitor, Compaq , is the largest PC seller , but Ms Condon said Dell now had a 9 per cent share in that market. She said that higher profit products, such as the Notebook Laptop, were performing well. Notebook had moved from fourth to third position in EMEA and was number one in Britain. "We recorded a shift in our unit mix towards the enterprise end of the market, to server storage and work stations."

Online sales now accounted for 48 per cent of the Dell direct sales model within EMEA. It is still unclear whether Dell's employees at the three manufacturing plants in Limerick and the sales support office in Bray will receive a profit share bonus for the quarter.