Dell's Dandy Outlook

So much for all those headlines over the past two weeks: "Tech is a ticking time bomb." "Market falls on tech warnings." Garbage.

Sure, a few companies have reported crummy news recently, such as Red Hat's (Nasdaq: RHAT  ) restatement, Unisys' (NYSE: UIS  ) miss, Intel's (Nasdaq: INTC  ) inventory swell, and Lexar's (Nasdaq: LEXR  ) margin malaise.

But unless you are invested in some kind of industry-tracking fund, you don't purchase sectors, you purchase companies. What the heck does one networking chip manufacturer's screw-up say about a computer maker's profitability? Zilch.

That's the real lesson to take away from Dell's (Nasdaq: DELL  ) guidance release today. Despite the financial media's howling about an impending tech downturn, this PC maker revised its second-quarter earnings guidance up from $0.29 per share to $0.31, which should represent a 29% increase over the prior-year period. Only half that gain will be owed to increased profitability, however -- the other penny is the result of a lower tax rate.

Still, the markup should give faith to holders of the recent Motley Fool Stock Advisor pick. Sure, this is no longer a fast-growth tech upstart, but with $4.5 billion in cash, a solid record of earnings growth, success with new products like MP3 players, and a one-point gain in PC market share, this is no languishing titan, either.

• Check out the real risks in tech.
• Read about Apple's (Nasdaq: AAPL  ) juicy quarter.
• Will AMD (NYSE: AMD  ) and Dell make strange bedfellows?

Fool contributor Seth Jayson has no position in any company mentioned. View his Fool profile here.