Dell hopeful of rise in sales

DELL NARROWLY beat analysts’ expectations for sharply reduced profit last night, even as the global downturn hit technology spending…

DELL NARROWLY beat analysts’ expectations for sharply reduced profit last night, even as the global downturn hit technology spending, helping its shares rise after hours.

The company gave little comfort to investors looking for signs of a quick turnaround, saying there was not enough momentum in the PC market to call a bottom yet. But it held out hope for a surge in sales next year as corporations replace their computer systems.

Dell did not give any detailed financial outlook. Last week larger rival Hewlett-Packard, which also reported lower quarterly profit, forecast a 4-5 per cent dip in fiscal year revenue.

Dell said net income fell to $290 million, or 15 cents a share, in the fiscal first quarter ended May 1st, down 63 per cent from $784 million, or 38 cents a share, in the period last year.

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The world’s second-largest maker of personal computers made a net profit of $290 million in the three months to May 1st, down 63 per cent from $784 million a year ago.

Excluding certain one-time restructuring costs, the company posted a profit of 24 US cents a share, just beating analysts’ average estimate of 23 cents a share.

Revenue fell 23 per cent from a year ago to $12.3 billion, versus Wall Street’s estimate of $12.7 billion. Dell’s global PC shipments fell nearly 17 per cent in the first calendar quarter, according to data firm IDC.

Dell is focusing on cutting costs in what it called a “challenging environment, concentrating more on profitability than growth.

In February, Dell boosted its 2011 cost-reduction target to $4 billion from $3 billion.

It cut its overall head-count by more than 9,000 jobs last fiscal year, ending with a total headcount of 78,900. It declined to give a new total for the end of the last quarter.

“We don’t believe there’s enough momentum to call a bottom yet,” Dell chief financial officer Brian Gladden said on a conference call. He added that there was “no real improvement” in business conditions in May.

Chief executive Michael Dell predicted a rise in PC sales next year, as corporations update their systems. – (Reuters)