Computer maker Dell's quarterly results blew past Wall Street expectations last night as the cost of components fell and businesses replaced ageing technology.
Its forecast for a 5% to 9% rise in revenue in its current financial year also modestly surpassed targets.
Dell reported a net profit of $927m, or 48 cents a share, in its fourth quarter to January 28, up from $334m, or 17 cents a share, a year ago. Revenue rose 5% to $15.7 billion, in line with expectations.
Dell posted a gross margin of 21.5% - helped in part by falling prices of items like memory chips and LCD screens.
Dell's servers and networking revenue climbed 16%, while commercial personal computer revenue rose 10%, as businesses spent to upgrade outdated hardware.
'There's still a majority of our customers who have not begun the corporate refresh, or who have started and still have a long way to go,' chief financial officer Brian Gladden said.
Although Gladden said he expects component costs to remain favourable through the first half of the new year, he downplayed input cost declines as the central factor in Dell's improved profitability. He stressed supply chain improvements and disciplined pricing. Dell's quarterly operating income was its highest in five years.
Dell still pulls in most of its revenue from selling PCs. It has benefited from a surge in spending as businesses of all sizes spend again on equipment after two years of recession.
Dell is waging an uphill battle to diversify its revenue base: it wants to become a larger player in the data centre 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 in those markets from the likes of IBM, HP and Apple.
