Dell profit, sales jump in 1Q, topping forecasts

For the three months ended May 2, Round Rock, Texas-based Dell Inc. earned $784 million, or 38 cents per share, up from $756 million, or 34 cents per share, in the same period a year earlier.

Dell says its revenue jumped 9 percent to $16.08 billion from $14.72 billion.

On average, analysts surveyed by Thomson Financial expected a profit of 34 cents per share on sales of $15.68 billion.

The company said strong growth of commercial and consumer products and services and lower operating costs as a percentage of sales helped drive the results above the forecasts.

Dell shares rose 12 cents Thursday, closing at $21.81 before the quarterly results were released. In extended trading, the shares jumped $2.02, or 9.3 percent, to $23.83.

Dell is trying to cut costs by $3 billion while also chasing Hewlett-Packard Co. in worldwide shipments of personal computers, a category it once led.

Dell still leads HP in U.S. PC sales, according to technology research firms IDC and Gartner Inc., but that could make Dell more vulnerable to a slowdown in the U.S. economy.

Chief Financial Officer Donald J. Carty told reporters that U.S. businesses "are holding back from spending" on desktops but that sales of servers and data-storage equipment were holding up.

The company reported that worldwide notebook computer shipments rose 43 percent from a year ago. Carty attributed the increase to a continuing shift from sales of desktops to notebooks and Dell gaining a greater market share of notebook sales.