NEW YORK (CNN/Money) - Dell Inc., the world's top manufacturer of personal computers, reported Thursday solid gains in both profits and revenues that it said were fueled by overseas sales and strong demand from businesses.

The Round Rock, Tex.-based company said it earned 33 cents a share, or $846 million, in the third-quarter ended Oct. 30, compared to 26 cents a share, or $677 million, a year ago.

Sales were $12.5 billion, an 18 percent jump from $10.6 billion in the comparable period a year ago.

The company also reported it is on track to meet Wall Street estimates for fourth-quarter sales and profits.

Dell's bread-and-butter business are desktop and notebook computers. But as consumer demand for personal computers has declined over time, the company has branched into storage, servers, software, printers and consumers electronics.

CEO Kevin Rollins said growth was strong across the board, signaling that the company's diversification strategy is working.

"We're seeing healthy demand in key segments of our business," Rollins told analysts during a conference call. "Overall it was a pretty strong quarter and there were not a whole lot of surprises for us."

Dell's earnings come two days after another tech bellwether, Cisco Systems, reported growth that disappointed investors and less than a week before its arch rival, Hewlett-Packard, is due to release quarterly finances.

Dell (Research) shares hit a 52-week high on Nov. 9.

Year-to-date Dell's stock price is up about 8 percent while the tech-heavy Nasdaq is up just 2 percent and Hewlett-Packard (Research) is down more than 17 percent.

Rollins added that the company should reach its goal of $60 billion in annual revenue in 2006, a full year ahead of schedule and 22 percent higher than fiscal 2004 forecasts.

Rollins said consumer demand for computers continued to be soft in the quarter and that government purchases dropped. But those signs of weakness, he said, were offset by 20 percent year-over-year growth in corporate spending and hefty boosts in sales abroad.

Rollins also said businesses are much more deliberate about their technology buys than they have been in the past -- a development he said is leading to a corporate demand that "is much smoother and much more consistent over time."

The company also benefited too from a drop in prices for components, which include flat panel displays and semiconductor chips.

In the quarter sales of notebook computers grew as a percentage of total company revenue. Dell's enterprise business -- which includes storage and servers -- did not grow as quickly as other segments, which some analysts said reflected fierce market competition.

In after-hours trading, Dell shares at first fluctuated wildly as investors expressed disappointment that Dell did not, as some Wall Street analysts expected, beat consensus estimates by one or two cents a share.

By early evening, however, the company stock had rallied and was up 60 cents to $37.85 a share.

Analysts said that a closer look at Dell's numbers revealed a number of promising signs.

Ali Irani, an analyst with CIBC World Markets Corp., was especially heartened by Dell's improved gross margins. At 18.5 percent, gross margins were "the best Dell has had in a very long time." He attributed the improvement to the drop in component costs.

Irani was also encouraged by evidence that Dell had weathered a tough summer and said the current quarter could be helped by macroeconomic factors like falling oil prices.

Overall, said Leslie Santiago, an analyst with Piper Jaffray, the "big takeaway is that Dell's growth profile and growth trajectory is not slowing....And they're getting into high-growth services and new product categories which are growing extremely well."

Santiago predicted that Dell shares would trade up Friday. He also expected Wall Street to raise Dell estimates for fiscal 2006.

In other company news, Dell officials also disclosed the company has repurchased $3.3 billion worth of stock this year.