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Dell's Rollins Eyes Growth Despite Earnings Dip

Growth opportunities for Dell remain strong despite an earnings setback in the third quarter, due in part to charges related to replacing faulty desktop PCs, according to Kevin Rollins, Dell president and CEO.

Specifically Rollins pointed to Dell's storage, printer, and software and peripherals businesses where the company holds single-digit market share positions compared to the more established 18% market share in Dell holds in PCs.

"We are disappointed we didn't reach our initial revenue target for the quarter, but we are very pleased with our ability to deliver industry-leading profitability, consistent growth and earnings, and a balanced P&L," Rollins said during a teleconference.

For the third quarter ended October 28, Dell reported net income of $606 million, or 25 cents per share, on revenue of $13.9 billion. That compares to net income of $846 million, or 33 cents per share, on revenue of $12.5 billion in the same period a year ago.

Dell issued an advisory last week that said its revenue would come in below its original target of $14.1 billion to $14.5 billion. The company also disclosed that it would take a charge of $442 million associated with the costs of repairing certain desktop PCs that used capacitors from a third-party vendor that failed to perform to specification. Rollins confirmed that the company had about 1,000 lay-offs during the quarter.

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