Dell Inc the world's second-largest personal computer maker, posted a rise in quarterly profit on Thursday but gave a cautious outlook, and its shares dropped nearly 7 percent.
Net income for Dell's fiscal third quarter grew to $766 million, or 34 cents per share, from $601 million, or 27 cents per share, a year earlier, as the company sold more laptops and component prices fell. Revenue in the quarter ended November 2 rose to $15.65 billion from $14.42 billion.
Dell booked costs of $50 million, or 2 cents per share, related to job cuts and asset disposals, plus $28 million, or 1 cent per share, for a year-long audit of its accounting. It also booked a 2 cent gain due to a lower tax bill.
Analysts, on average, had expected earnings of 35 cents per share and revenue of $15.36 billion, according to Reuters Estimates.
Dell said restructuring costs related to ongoing job reductions, investments in the business and acquisitions may adversely impact the company's performance.
A slowing decline in component costs and a seasonal product-mix shift to U.S. consumer and international regions may also hurt results, Dell said.
Dell shares fell 6.7 percent in extended trading, after adding 45 cents, or 1.6 percent, to close at $28.14 on Nasdaq.
Dell, based in Round Rock Texas, was helped along with larger rival Hewlett-Packard Co by falling prices for computer memory and other components and by strong PC demand in U.S. back-to-school sales and pre-holiday gift spending. The company in June began selling PCs in stores for the first time after 23 years of direct-only sales via phone or Internet.
Dell shares, up 10 percent this year through Wednesday, trade at 19 times estimated earnings per share for its fiscal year ending in January, compared with a multiple of 17 for HP's fiscal year ended in October and IBM's 2007 multiple of 15.