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Desktops

Dell increases second-quarter forecast

The No. 1 computer maker says its earnings per share will be 2 cents higher than expected.

Dell raised its second-quarter financial guidance on Friday, a few hours ahead of its annual shareholder meeting.

The Round Rock, Texas, PC maker expects to post a profit of 31 cents per share, 2 cents higher than its initial projection, issued in May. Dell's second quarter ends July 30, and the company will report earnings Aug. 12.

Dell expects a 1 cent increase from higher profitability and a 1 cent increase because of a decline in its global tax rates. The computer maker, however, expects that its second-quarter revenue will remain the same as its initial projection of $11.7 billion.

The company, which will make Kevin Rollins its new CEO as part of its shareholder meeting later Friday morning, has been on a roll of late.

Dell has again outpaced rival Hewlett-Packard in PC shipments; during the second quarter, Dell extended its share of the worldwide PC market to 18.3 percent from 17.2 percent during the same period last year, according to IDC, which released results Thursday evening.

According to the research company, Dell grew faster than HP in both the world and the U.S. PC markets during the second quarter. HP had 15.7 percent of the worldwide market, the same share it had a year ago, IDC said.

Dell's steady growth in PC shipments and its increasing market share have boosted its quarterly revenue and profit. In the first quarter, Dell raised and then met its earnings estimate, attributing the improvement to growth in international markets.

The company ended its fiscal 2004 in January with a net income of $2.6 billion, or $1.01 per share, on revenue of $41 billion, moving it closer to its stated goal of reaching $60 billion in annual revenue. So far this quarter, Dell said, it has seen strong sales to both small and large businesses and also in international markets.

Later Friday, Rollins and company founder Michael Dell, who will step aside as CEO to act as Dell's chairman, plan to discuss the company's operations and strategies for shareholders.

For his part, Rollins is expected to guide Dell along its current path, with little in the way of change.