Dell Sees Profit Increase 28%, Cites Strong Demand in April

Dell Inc. said Thursday that strong April sales helped boost first-quarter profit 28% as the world’s largest personal computer maker continued to solidify its market dominance.

Dell earned $934 million, or 37 cents a share, up from $731 million, or 28 cents, a year earlier. Revenue rose 16% to $13.4 billion. The Round Rock, Texas-based company said second-quarter revenue should grow 16% to 18%, with profit of 37 cents to 39 cents a share.

“They’re boring in their continued excellence,” said Barry Jaruzelski, vice president of the technology practice at management consultant Booz Allen Hamilton. “It’s hard to remember the last time anything went amiss. They continue to gain share, continue to grow, hold and expand margins, gain hold in new regions.”

Dell shares rose 7 cents to $36.61 on Nasdaq and gained an additional 99 cents in after-hours trading after the earnings announcement.

“There were no surprises,” said Michael Cohen, research director at San Diego-based Pacific American Securities. “Dell continues to be a great growth story. They’re doing 20%-plus growth in every geography outside the Americas.”

The company’s strong showing contrasts with lackluster performance at other key PC makers such as IBM Corp. and Hewlett-Packard Co. IBM last month reported quarterly earnings that fell short of expectations, and HP is expected next week to report a quarterly profit of 36 cents, up 6% from a year earlier.

“Our competitors continue to adjust their business models and strategies as they struggle for profitability,” Rollins said.

China’s Lenovo Group Ltd. is buying IBM’s PC business for $1.25 billion, and HP ousted Chief Executive Carly Fiorina in March.

Dell has been shifting away from a reliance on PCs, which accounted for about half of sales last year, and drawing more revenue from storage, services, peripherals and consumer electronics. PCs represented about 40% of first-quarter revenue, Chief Executive Kevin Rollins said.

“As we grow to $80 billion, our business is increasingly diversified, and we have multiple opportunities,” he said. “This allows us to target growth in [the] most attractive segments in the quarter.”

Although business in the U.S. was “a little slower at the beginning, [it] really picked up in April and had a strong finish to the quarter,” said Rollins, who cautioned against interpreting a one-month bounce as signaling a broader comeback in technology spending.

“One robin doesn’t make a spring,” he said. “We don’t take one data point up or down as a trend.”