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Dell Reports Preliminary Q2

Dell reports Q2 preliminary revenue of $14.8B

ROUND ROCK, Texas -- Dell (NASDAQ:DELL - News) today reported preliminary results for its second quarter of fiscal year 2008, with revenue of $14.8 billion, operating income of $896 million and earnings per share of $0.32. Strength in enterprise products and services, improved average selling prices and favorable component costs drove profitability in the quarter. Cash and marketable securities were $13.8 billion at the end of the quarter.

"We continue to invest in company initiatives that align our products and services around customers' needs in order to drive long-term, sustainable performance and extend our position as a trusted technology partner," said Chairman and CEO Michael Dell. "While our results demonstrate we've made progress against our goals, we are still in the early stages of transforming our company's structure, costs and operations."

Operating Profit Impacted by Higher Expenses

Several factors adversely impacted operating expenses in the quarter, including $102 million, or $0.03 per share, in incremental compensation expense related to payments for expired in-the-money stock options; $59 million, or $0.02 per share, in costs associated with the Audit Committee's investigation into certain accounting and financial reporting matters; and higher headcount and associated costs related to investments in sales and customer support.

As the company continues to implement its transformation program, the priority is to drive profitable growth while reducing operating expenses as a percentage of revenue. The company expects to accomplish this by improving front-line productivity, reducing headcount where appropriate and investing in infrastructure and key growth initiatives. The company is focused on the optimal alignment of resources, coupled with scaling via growth initiatives and cost reduction, and continues to pursue reductions in headcount.

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