Dell, the No. 3, PC maker, reported fourth-quarter earnings two cents below estimates as revenue rose slightly above expectations.

The company reported operating earnings of 51 cents a share, on revenue of $16 billion, about $500 million above estimates. Net income was 43 cents, a nickel below the year-ago period.

Shares of Dell had surged nearly 25 percent this year. They fell more than 4 percent as soon as earnings were announced, apparently because the results did not exceed estimates, like those for Apple.

We are more committed than ever to both developing and investing in innovative solutions, said founding CEO Michael Dell.

Growth in PC sales is hardly skyrocketing. For 2011, market researcher Gartner estimates, Dell's increase was a meager 1.8 percent although that was nearly triple the anemic 0.5 percent growth in the overall market.

Dell's share was 12.1 percent of the overall 352.8 million PCs shipped, Gartner said. Only Hewlett-Packard and China's Lenovo Group sold more.

Analysts expected Round Rock, Tex.-based Dell to report fourth-quarter net income of 53 cents a share, the same as last year, but a penny below last quarter's 54 cents.

Revenue was expected to rise only 1 percent to $15.94 billion from the year-ago figure or only $57 million from last quarter's $15.37 million. In fact, it was $16.03 billion.

Dell, which closed its fiscal year Feb. 2 like many major retailers, reported full-year net income of $2.13 a share on revenue of $62.07 billion, far better than 2011's net of only $1.35 on revenue of $61.49 billion.

Last quarter, Dell, generated nearly 20 percent of revenue from services, mainly software, which generates higher margins than selling PCs and servers. That was 6 percent ahead of 2010 and helped Dell increase its gross margins to 22.6 percent from only 19.5 percent a year earlier.

Dell has acquired various services providers in recent years including Perot Systems, SecureWorks and Compellent, which enable the company to better compete against rivals Hewlett-Packard, No. 1 in computer services and PCs, and IBM.

Dell recently hired John Swainson, the former IBM executive brought in to clean house at troubled software developer CA Technologies, the latest name for the former Computer Associates, as president of software.

The company may well be on the prowl to buy a midsized software company. Dell will also report its cash and investments. They rose to $18.16 billion from $16 billion last quarter..

At that level, surmises analyst Peter Misek of Jefferies, Dell might look at a company slightly less valuable than Houston-based BMC, valued at nearly $6.5 billion, such as Quest Software, valued at $1/73 billion or CommVault Systems, valued at $2.4 billion.

Oceanport, N.J.-based CommVault is more in the storage sector, which would help Dell compete better against EMC, which already resells products through Dell, as well as Oracle.

Potentially, CEO Dell, 46, who founded the company in his dormitory at the University of Texas, could also face a challenge: last week, Greenlight Capital, the hedge fund managed by David Einhorn, said it had acquired 14 million shares.

That probably wouldn't be a problem considering that Dell himself still owns 243 million shares, or 14 percent of the outstanding equity.

Dell shares closed up 5 cents at $18.21, valuing the company at $32.7 billion