I think the market was beginning to price in Doomsday results, said Edward Jones analyst Bill Kreher. Dell continues to go for profits over growth, and costs are one level that the company can control and they are successfully executing on that.
Net profit in Dell's fiscal fourth quarter ended January 30 fell 48 percent to $351 million, or 18 cents a share, from $679 million, or 31 cents a share, in the year-ago period.
Excluding one-time items, profit was 29 cents a share, above the 28 cent average estimate by analysts surveyed by Reuters Estimates.
Revenue fell 16 percent to $13.4 billion, missing analysts' average forecast of $14.06 billion.
Chief Executive Michael Dell said in a statement that a lot of technology spending is being deferred until economic visibility improves, so the company has to be very disciplined in managing costs.
Dell cut operating expenses by 16 percent in the quarter, and raised its longer term cost-reduction target. Last March, Dell said it would cut costs by $3 billion every year by the end of fiscal 2011. It said on Thursday that it now saw opportunities to raise that cost savings target to $4 billion.
The world's second-largest maker of personal computers did not give financial forecasts, but said, Dell believes that global IT end-user demand will continue to be uncertain and challenging.
Dell said its consumer division saw shipments rise 18 percent, boosting its global market share to nearly 9 percent, but as more buyers were choosing lower-priced notebooks and desktop computers, revenue fell 7 percent to $3 billion.
Shares of Round Rock, Texas-based Dell fell to $7.90 in extended trading before recovering to rise to $8.47 from their Nasdaq close of $8.21. The stock has fallen around 65 percent over the past six months.
(Reporting by Gabriel Madway and Tiffany Wu; editing by Richard Chang)