Dell Computer Corp, the world's second-largest personal-computer maker, said first-quarter profit rose 31 percent as it took computer sales from rivals and increased overseas revenue.
Net income rose to US$598 million, or US$0.23 a share, from US$457 million, or US$0.17, a year earlier, the company said in a statement. Sales in the period ended May 2 rose 18 percent to US$9.53 billion from US$8.07 billion, the fifth quarterly increase in a row.
Dell shipments rose 29 percent from a year earlier while the industry lost 1 percent. In the quarter Dell gained market share for PCs and server computers from rivals such as Hewlett-Packard Co (HP) and Gateway Inc. Dell, which gets most of its sales in the US, said shipments grew more than 30 percent in Europe and 67 percent in China -- now Dell's fourth-largest national market.
"They're taking market share, growing revenue like they said they would," said Chuck Jones, who helps manage US$8 billion at Stein Roe Investment Counsel, which owns Dell shares.
The company forecast second-quarter profit of US$0.24 a share on sales of more than US$9.7 billion. Analysts expected on average earnings of US$0.24 on revenue of US$9.75 billion, according to a poll by Thomson Financial.
In last year's second quarter, net income was US$0.19 with sales of US$8.46 billion.
Dell shares, which have risen 41 percent in the past three months, fell as much as US$0.78 to US$31.40 after the sales forecast disappointed some investors. They were down US$0.64 to US$31.54 at 6:28pm New York time.
"You may have investors that were buying into the company in anticipation of it materially beating its revenue and earnings estimates, and it really hasn't done that," said Jim Lyon, director of equity investments at Oakwood Capital Management LLC, which oversees US$360 million, including 63,000 Dell shares.
The shares fell US$0.07 to US$32.18 as of 4pm New York time on the NASDAQ market. Shares of the Round Rock, Texas-based company have climbed 20 percent this year. The Standard & Poor's 500 Index has risen about 7.6 percent.
Dell said the rest of the computer industry should have shipment increases of 3 percent.
"The IT spending environment has not changed significantly but appears to have stabilized," President Kevin Rollins said on a conference call with analysts.
Dell said shipments to European countries were partly aided by a weak US dollar, Chief financial officer James Schneider said.
HP is the world's biggest PC maker as ranked by units shipped in 2002. Dell claimed a 16.9 percent market share in the calendar first quarter, compared with HP's 15.6 percent, according to Dataquest Inc.
HP chief executive Carly Fiorina has said the two companies will exchange the top position in the coming quarters. Rollins disagreed.
Dell's facility in Taiwan will open Monday after being shut down because one employee was suspected of having SARS, Rollins said. Employees have been working from home on the Internet, he said.
SARS "has had no impact on our ability to manage," Rollins said.