AUSTIN — Dell Inc. chief executive Kevin Rollins said Thursday the company will continue to expand beyond traditional desktop PCs and offer more flat panel televisions, laptops and printers to help grow its business to $80 billion within four years.
"As we've diversified, the PC unit volumes are less indicative of the way our company will perform," Rollins said during Dell's annual meeting with analysts. "While we're still interested in PC growth, it's not going to be the predictor it once was."
His comments came a day after Dell reaffirmed its first-quarter earnings guidance of 37 cents per share on sales of $13.4 billion issued Feb. 10, in line with analysts surveyed so far by Thomson First Call. Dell releases earnings for the February-April period after markets close May 12.
Dell, based in Round Rock, Texas, predicted that revenue will grow from $49 billion to $80 billion over the next three to four years. Analysts expect the company to post sales of $57.46 billion this year, $66.11 billion the next and $75.63 billion in fiscal 2008.
After nearly hitting $50 billion in sales last year, the company raised its goal from $60 billion to $80 billion in annual revenue.
Rollins acknowledged the time frame of three to four years for reaching $80 billion wasn't as specific as investors would like, and he said the timeline would continually be refined.
"People go out of business in this industry in two years," he said. "All you're doing is setting yourself up for failure by putting those predictions out there. We will try to narrow that band for you over time as we see the industry unfolding."
Dell has strengthened its industry-leading position in PC sales by reducing costs and undercutting rivals on price.
Rollins said the company's increasing push into servers, data-storage equipment, printers, consumer electronics and technology services will help offset cooling desktop PC demand. According to IDC, PC shipments are expected to grow by a more moderate 10 percent this year.
"It's clear to us that things are a bit slower, even a bit slower than we had thought, but it's nothing that we're lighting our hair on fire," he said. "It still is moving at a very healthy pace."
Rollins said Dell has maintained profitability in a turbulent industry that has seen executive shake-ups at Hewlett-Packard Co. and the recent purchase of International Business Machines Corp.'s personal computing division by Lenovo, China's top computer maker.
Analysts welcomed the diversification talk in the face of rivals HP and IBM.
"It's a scale issue. What they're really saying is that they are going to be able to scale to the level of an IBM or an HP," Ron Silliman of Gartner said. "Dell is going into that scale more focused but also talking diversification. This organization is probably the most rigorous in the industry on the question of execution."
Dell also said it would spend $2 billion to repurchase stock in the current quarter, or about 50 million shares, more than double what the company had initially planned. In the past four years, the company has bought back enough stock to reduce its average share count by more than 9 percent.