Dell’s Third-Quarter Profit Surges 71%

Dell Computer Corp.’s robust growth continued in the third quarter, with the company saying Monday that profit surged 71% and that the outlook for its computer systems remains strong.

Dell beat Wall Street forecasts with net income of $248 million, compared with $145 million a year ago. Earnings per share jumped 77%, to 69 cents from 39 cents. Revenue rose 58%, to $3.19 billion from $2.02 billion.

The Round Rock, Texas-based company trailed only Compaq Computer Corp. in U.S. personal computer unit shipments in the quarter and is ranked third worldwide, according to preliminary data.

Dell said revenue growth was helped by continued strong demand for high-end systems, despite the recent industry wave toward personal computers priced below $1,000.

“Our average revenues per unit again remained stable in this quarter, in contrast to many in our industry,” Chairman Michael Dell said in a statement. “This clearly reflects the fact that our customers continue to purchase more fully featured systems.”

The growth pushed earnings per share 4 cents above the 65-cent consensus estimate of analysts that was published by research service First Call.

But even that was not enough to help Dell shake the effects of a broad market decline linked to financial woes in Asia that have hit technology stocks particularly hard. The earnings were announced before the end of trading. Shares of Dell fell $3.63 to close at $79.75 on Nasdaq.

Some traders cited the fact that Dell failed to hit a 70-cent-per-share “whisper number,” the term used to describe last-minute unpublished estimates that circulate on Wall Street. Others noted that the earnings missed the most optimistic analysts’ estimates, which ranged as high as 73 cents a share.

Dell said its Internet site continues to generate sales of more than $3 million per day, a rate that works out to $1 billion a year in sales.

With its success on the Web and its cost-saving direct-marketing approach, Dell has forced an industrywide shift in the way companies sell personal computers.

Dell said it expects overall demand to remain strong, particularly given the current climate of falling prices for memory chips and other computer parts.

“The outlook for overall demand in the computer systems industry remains very healthy,” Dell said. “Declines in key component costs combined with improved processor performance are likely to drive continued strong demand as we move into the new year.”