Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Dell profit jumps on strong sales to businesses

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Dell Inc. said Thursday that strong demand from business customers helped drive the PC maker's profit up 52% in its most recent quarter.

The Round Rock, Texas, company reported net income of $441 million, or 22 cents per share, for the quarter ended April 30. That's up 52% from $290 million, or 15 cents per share, in the same period a year ago.

Excluding certain accounting charges, Dell reported earnings of $824 million, or 30 cents per share, in the quarter. Analysts polled by Thomson Financial, who typically exclude one-time items from their estimates, were looking for 27 cents.

Sales rose 21% to $14.9 billion, versus a forecasted $14.3 billion.

"Commercial demand continued to build in the first quarter and Dell is optimistic the trend will continue throughout the year," the company said.

Dell (DELL, Fortune 500) said it expects demand from corporate customers to remain strong as businesses upgrade IT equipment. But the company also said sales could slow in the current quarter due to seasonal factors.

Sales to large businesses rose 25% to $4.2 billion, driven by demand for servers and technology services. Revenue from public agencies rose 22%, while sales to small and medium businesses rose 19% in the quarter.

Dell's consumer business, traditionally its smallest division, posted a 16% sales gain.

The results reflect a growing recovery in corporate spending on information technology, which slumped along with global economic activity last year.

On Monday, Hewlett-Packard (HPQ, Fortune 500), the world's largest technology company, said its PC sales jumped 21% in the most recent quarter.

However, HP reported a 6% decline in sales versus the prior quarter, suggesting that Dell is gaining market share, according to Dinesh Moorjani, an analyst at Broadpoint AmTech.

Despite the upbeat results, Dell (DELL, Fortune 500) shares fell over 4% in after-hours trading to $14.32.

"Investors were looking for greater margin improvement," Moorjani said.

Dell's gross margin widened to 16.9%, up from 16.6% last quarter and but down compared to last year's 17.6%.  To top of page

Search for Jobs

Index Last Change % Change
Dow 20,821.76 11.44 0.05%
Nasdaq 5,845.31 9.80 0.17%
S&P 500 2,367.34 3.53 0.15%
Treasuries 2.32 -0.07 -2.97%
Data as of 7:27am ET
Company Price Change % Change
Bank of America Corp... 24.23 -0.35 -1.42%
Spectra Energy Corp 40.68 -0.32 -0.78%
Chesapeake Energy Co... 5.66 -0.09 -1.57%
Hewlett Packard Ente... 22.96 -1.70 -6.89%
Ford Motor Co 12.47 -0.09 -0.72%
Data as of Feb 24
Sponsors

Sections

Baltimore Orioles executive John Angelos said he would want President Trump to apologize for all the offensive comments he's made before he's invited to throw out the first pitch at Camden Yards. More

A draft of the House Republicans' bill to repeal Obamacare would replace its subsidies with less generous tax credits, increase the amount insurers could charge older Americans and effectively eliminate Medicaid for low-income adults. More

Data Refuge collects federal data about climate change in order to preserve the information and keep it publicly accessible. More