Dell Profits Up 15 Percent as PC Sales Rise

Updated: Thursday, 19 Aug 2010, 2:48 PM MDT
Published : Thursday, 19 Aug 2010, 2:39 PM MDT
By John Kell

(Dow Jones) - Dell reported Thursday that second-quarter profit improved 15 percent as the company's commercial business continued to benefit from improved demand.

For the third quarter, Dell said it expected seasonal improvements from federal-government sales and commercial businesses, "resulting in a pickup in the low-single digits."

Dell felt the downturn longer than most companies, largely because the corporations that account for a large portion of its revenue were among the first to cut back. But the company, along with larger rival Hewlett-Packard, is expected to benefit for the rest of the year as businesses and governments continue to replace aging computer systems.

For the quarter ended July 30, Dell posted a profit of $545 million, or 28 cents a share, up from $472 million, or 24 cents a share, a year earlier. Excluding severance-related charges and other items, earnings rose to 32 cents from 29 cents. Revenue grew by 22 percent to $15.53 billion.

Analysts surveyed by Thomson Reuters projected a profit of 30 cents on revenue of $15.22 billion.

Revenue from desktop personal computers climbed 17 percent, while the mobility segment, mainly notebook computers but also other mobile devices, had a 21 percent increase. By customer segment, Dell reported an increase for all four segments, led by a 38 percent increase in the large enterprise segment and a 25 percent jump by the small and medium business segment.

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