March 24, 2011 / 7:39 PM / 7 years ago

Dell says no material supply disruption from Japan

LONDON (Reuters) - Dell, the world’s second-biggest computer maker, has not seen any material disruption to electronics supply chains as a result of the Japanese earthquake of two weeks ago, a senior executive said.

Paul Bell, global head of Dell’s large enterprise and public sector business, said the impact on Dell had mainly come from lower demand from Japan. “Supply chain disruption has not been material,” he told journalists in London.

Japan, which suffered a 9.0 magnitude earthquake and 10 meter tsunami two weeks ago, supplies about a fifth of the world’s semiconductors and 14 percent of all electronic equipment manufacturing, according to research firm IHS iSuppli.

Bell also said Dell’s public sector business in Europe, which was hit last fiscal quarter by spending constraints in many countries, was still going through a tough patch.

Asked whether it had got any tougher, he replied: “It’s about the same. It doesn’t change that fast.”

Dell’s results for the quarter to January 28 beat expectations as the company sold more higher-margin services, component costs slid and corporations replaced aging technology.

Bell said corporate customers were still willing to spend on IT, although it was not a simple matter of replacing personal computers or servers as companies rethought the types of equipment they needed.

“Yes,” he answered when asked whether the increased willingness to spend that Dell had seen from enterprises last quarter was still there.

Dell shares traded up 1.1 percent at $15.25 at 1841 GMT, broadly in line with the Nasdaq, which rose 1.3 percent.

Dell’s large enterprise and public sector units together accounted for about 54 percent of group sales last year.

Reporting by Georgina Prodhan. Editing by Jane Merriman

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