Dell profit up 52 percent on improved corporate sales

The company's profit and revenue both were higher than analysts expected

Dell reported its first increase in quarterly profits for two years on Thursday, helped by an uptick in commercial spending and its ongoing efforts to reduce costs.

Net income for the three months ended April 30 was US$441 million, up 52 percent from the same quarter last year. Excluding one-time charges, Dell made $0.30 per share, ahead of the $0.27 forecast by financial analysts polled by Thomson Reuters.

Revenue was up 21 percent to $14.87 billion, ahead of the analyst estimate of $14.27 billion.

The results will come as a relief for Dell, which reported declining profits for the past seven quarters. The company is more dependent than its rivals on hardware sales to businesses, a sector of the economy that is recovering more slowly from the recession.

"We had a solid first quarter in an improving global environment. Demand has picked up, especially with commercial customers, who make up approximately 78 percent of our revenue," Chief Financial Officer Brian Gladden told reporters.

Revenue from large enterprises picked up 25 percent from a year earlier, to $4.2 billion. Sales of "mobility products" -- mostly laptops -- climbed 18 percent to $4.6 billion, while desktop sales were up a more modest 13 percent.

Sales of servers and networking equipment climbed 39 percent to $1.8 billion, and services revenue -- bolstered by Dell's acquisition of Perot Systems last year -- jumped 53 percent to $1.9 billion, Dell said.

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James Niccolai

IDG News Service
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