Re Dell:
When Dell reports its second-quarter earnings on Thursday, analysts hope to be calmed by the company's steadiness. True, earnings aren't expected to be startling: Analysts are predicting Dell will report that second-quarter earnings have dipped 4.4% from the year-ago quarter. But along with steadily chipping away at costs (it shed 3,700 of its roughly 88,200 workers late in the first quarter), Dell is countering rivals market by market, especially in expanding areas overseas.
Overall sales are expected to rise by 7.9%. This figure is just behind the 10% sales jump reported by Hewlett-Packard (nyse: HPQ - news - people ) earlier this month and the 13% jump posted by IBM (nyse: IBM - news - people ) the month before, but it's ahead of the 1.4% dip posted by struggling Sun Microsystems (nasdaq: JAVA - news - people ).
Analysts are predicting Dell's net income will be $713.1 million, or 35 cents per share, on sales of $15.9 billion, compared to net income of $746.0 million, or 33 cents per share, on sales of $14.8 billion during the year-ago quarter. Investors are counting on Dell for steady good news. So far this year, its shares have risen 19.9%, to $25.04 from $20.89.
Most boring of all, Dell's servers--the unsexy back office gear that keeps corporate e-mail and accounting systems perking along--may be on a roll. Tech tracker Gartner predicts that Dell cranked out a 15% increase in server sales revenue during the second quarter (measured against sales a year ago). If that turns out to be true, Dell's gains will be fatter than the second-quarter server sales of rivals Hewlett-Packard, Sun and IBM.
Dell's profit margins may drop as Dell's lower-margin retail and international business outpaces the company's growth in other areas. But behind those drab numbers, analysts see signs of progress. Dell may be using those margins to win over customers--a strategy that should not surprise rival Hewlett-Packard, which now dominates the PC market.
