"Dell is still in the early stages of a turnaround, but they're showing good progress," says equity analyst Brent Bracelin at Pacific Crest Securities. In addition to its accounting problem, Dell has been losing market share to rivals such as Hewlett-Packard.
Strong server sales of $1.6 billion impressed, Bracelin says. But Dell's PC unit continues to struggle, he says.
The division may take another hit if supply problems don't improve. Dell is short of laptop screens and plastic casings for a new line of laptops that come in several colors. The company is trying to fix the problem as fast as it can, says spokesman Bob Pearson. Dell predicted that parts availability should improve sometime in the next six months.
