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, three 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 expected.
The majority of Dell’s business comes from selling computers and other hardware to companies and large organizations. It also has a smaller technology services division, expanded with a $3.9 billion acquisition of Perot Systems last year.
Dell and much of the technology industry fared poorly during the worst of the recession, when businesses stopped spending to upgrade their systems and consumers flocked to the least expensive, and least profitable, PCs.
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 starting 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…