Computer maker Dell Inc. said Thursday its first-quarter net income rose 52 percent, helped by sales of computers to businesses and technology services to public-sector customers.
But Dell's gross profit margin dropped from a year ago, and the company said certain PC components are likely to remain in short supply. Investors sent shares down in extended trading.
For the February-through-April quarter, Dell's net income rose to $441 million, or 22 cents per share, from $290 million, or 15 cents per share in the same period last year.
Excluding certain items, Dell said earnings totaled 30 cents per share, 3 cents more than Wall Street analysts were expecting, according to a Thomson Reuters survey.
Dell's revenue rose 21 percent to $14.9 billion, more than the $14.3 billion analysts were expecting.
Dell's report Thursday echoed what its larger competitor, Hewlett-Packard Co., said Tuesday, and what industry research groups published in April: Corporations were replacing aging servers and other behind-the-scenes technology first, and were just beginning to buy new PCs for employees.
Dell said revenue from large business customers jumped 25 percent to $4.2 billion in the latest quarter. Revenue from small and medium businesses increased 19 percent to $3.5 billion.
Brian Gladden, Dell's chief financial officer, said during a conference call that companies' desire to upgrade employee computers to Microsoft Corp.'s latest operating system, Windows 7, will fuel sales of new Dell computers, since less than 5 percent of Dell's customers have upgraded so far.
