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After announcing last week that it plans to save $3 billion over the next three years by slashing production costs in all areas, Dell Inc. (NASDAQ: DELL)'s Chief Executive Michael Dell announced today that he expects a profitable 2008 year for the company. Dell's goal to improve profits for the year will be a result of its strategy to move its resources to growing emerging market countries.Dell also restated the company's target to buy back $1 billion of its own shares during this quarter. The move follows another repurchase of $4 billion in the fourth quarter. Over the long term, Dell aims an earnings per share growth each year and is confident it has "the right plans in place" to get it, Dell said.
Michael Dell predicted that 2008 would be a prosperous year as sales numbers are already looking great. For example, in Israel, the company last year saw an increase of 67% for its sold products, and it has been seeing even faster growth during the first three months of this year.
Even in the teeth of an economic slowdown, Dell expects "pretty healthy" growth in 2008 as the second largest computer maker focuses its resources on growth areas such as China and the Middle East. The company plans to launch new products that could efficiently compete against its rivals. Dell aims to release to the market this year a new computer able to compete with the $500 mini-notebook of sector leader Hewlett Packard Co. (NYSE: HPQ).
Looking ahead to the company's opportunities to grow, Dell is predicting that devices in the future will "blur the line" between smartphones and computers. However, for the moment, the company will continue to rely on more traditional computers as its main profit business.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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