Dell Inc's quarterly earnings and margins blew past Wall Street's expectations as component costs slid and corporations replaced aging technology, propelling its shares 6 percent higher.
Dell, which is trying to shed a reputation for specializing in low-margin computers, still pulls in most of its revenue from selling personal computers. It has benefited from a surge in spending as businesses of all sizes spend again on equipment after two years of recession.
Shares of Round Rock, Texas-based Dell leapt nearly 6 percent to $14.73 after hours, following a brief trading suspension, from a regular Nasdaq close of $13.91.
The No. 2 PC maker reported a net profit of $927 million, or 48 cents a share, in the fiscal fourth quarter ended January 28, up from $334 million, or 17 cents a share, in the year-ago period.
Excluding items, Dell earned 53 cents a share, beating the average analyst estimate of 37 cents a share, according to Thomson Reuters I/B/E/S.
Its non-GAAP gross margin came in at 21.5 percent, well ahead of analysts' estimate of 18.6 percent. Revenue rose 5 percent to $15.7 billion, matching Wall Street's target.
(For a graphic comparing Dell's share price performance and other key metrics with rivals, click http://r.reuters.com/kyr97r)
For fiscal 2012, Dell expects revenue growth of 5 to 9 percent, and non-GAAP operating income growth of 6 to 12 percent.
The quarterly results offered affirmation of Dell's continuing efforts to turn itself around and boost profitability.
Dell is waging an uphill battle to diversify its revenue base: it wants to become a larger player in the data center equipment market, a provider of IT services, and gain a toehold in the fast-growing mobile space with tablets and smartphones.
But it faces stiff competition from the likes of International Business Machines Corp, Hewlett-Packard Co and Apple Inc.
(Writing by Edwin Chan; Editing by Richard Chang)