Dell Inc. founder and chairman Michael Dell handed over the chief executive’s job to president Kevin Rollins on Friday as the computer giant raised its earnings guidance for the second quarter,citing better results from operations and a lower global tax rate.
Michael Dell, who started the company in 1984 while a student at the University of Texas, announced in March that he was stepping down as CEO and made the move official at the company’s annual stockholder’s meeting.
Before the meeting, the company announced it expects to earn 31 cents a share in the quarter ending July 30, an increase of 29 percent from a year ago and two cents per share better than initial guidance.
Analysts surveyed by Thomson First Call had expected earnings of 29 cents a share for the quarter.
Company officials said in a statement that higher operating profitability is expected to produce per-share earnings of 30 cents, with the balance of the guidance increase attributable to a further decline in the manufacturer’s global tax rate.
The company said it still expects second-quarter revenue of $11.7 billion and a second-quarter tax rate of 24 percent. That brings the average rate for the first half of the year to 26 percent, which is consistent with current expectations for all of fiscal 2005, given continued strong growth in business outside the United States, the company said.
Dell is expected to report second-quarter earnings on Aug. 12.
Michael Dell said Rollins has helped him run the company for the past seven years.
“While I’ve been getting most of the credit, there is no single person who deserves more recognition for Dell’s great accomplishments than Kevin Rollins,” he said. “Kevin’s new CEO title is as much about recognizing what he’s already done as it is about our confidence in his many future contributions.”
The founder added that as chairman he would remain “fully engaged as ever” in the company’s affairs.
Source: Associate Press