Dell's Sales, Cost Savings Boost Profit

From Reuters

Dell Inc. said Thursday that third-quarter profit rose as the No. 1 personal computer maker kept costs low and revenue grew more than analysts expected, helped by strong sales of servers and data-storage machines.

Dell said sales rose to $10.6 billion from $9.1 billion a year earlier. Analysts had expected revenue of $10.5 billion.

"That's more than they've beaten guidance by in the past four quarters," said Chuck Jones, a technology analyst for Stein Roe Investment Counsel, which holds Dell shares in customer accounts.

Net income rose to $677 million, or 26 cents a share, from $561 million, or 21 cents, a year earlier. Earnings met the forecast of analysts polled by Reuters Research.

The Round Rock, Texas-based company also forecast fourth-quarter revenue that exceeded analyst expectations.

Dell said it expected fourth-quarter shipments to be up 25% from a year earlier. It forecasts revenue of $11.5 billion and per-share earnings of 28 cents.

Dell, which undercuts competitors using its direct-to-customer sales method, said it gained market share during the quarter in most product lines.

Dell shares fell 3 cents to $35.64 on Nasdaq.

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