SEATTLE (AP) -- Personal computer maker Dell Inc. said Tuesday its net income more than doubled in the most recent quarter to handily beat expectations, as businesses spent more on computers, servers and other technology.
Dell also issued annual revenue guidance for the next fiscal year that beat Wall Street's forecast. The results sent shares soaring in extended trading after the report was released.
Net income soared to $927 million, or 48 cents per share, from $334 million, or 17 cents per share, a year earlier.
Excluding certain items, Dell earned 53 cents per share, blowing past Wall Street's expectations. Analysts surveyed by FactSet forecast earnings of 36 cents per share.
Revenue rose 5 percent to $15.69 billion from $14.9 billion in the year-ago quarter. That's less than the $15.75 billion analysts predicted.
Dell has been working to increase the proportion of server computers, data storage devices and technology consulting services it sells, because those areas are more profitable than the basic PC business. Compared with a year ago, however, each of Dell's product categories accounted for about the same amount of revenue in the quarter. Personal computers continued to make up more than half of Dell's revenue.
Revenue from large enterprises and from small and medium-size businesses rose 12 percent each to $4.7 billion and $3.7 billion, respectively. Public-sector revenue increased 4 percent to $4 billion.
Those increases helped Dell offset sluggish consumer spending on computers. Revenue from the consumer segment fell 8 percent to $3.3 billion.
A year ago, Microsoft Corp.'s updated PC operating system, Windows 7, went on sale, luring more shoppers and making for a tough comparison this year. In an interview, Dell Chief Financial Officer Brian Gladden said he expects the consumer PC business will remain weak this fiscal year, in part because people are thinking about buying tablets such as Apple Inc.'s iPad.
Analysts are keeping a close eye on Dell's gross margin, a measure of how efficient the business is. This quarter, gross margin was 21 percent, better than the 18.6 percent analysts expected.
Gladden said lower costs for components helped contribute to the stronger gross margin, as did improvements in how the company sources parts and manufactures computers.
For the full year, Dell said net income increased 84 percent to $2.64 billion, or $1.35 per share, from $1.43 billion, or 73 cents per share in the prior year.
Revenue rose 16 percent to $61.49 million from $52.9 million.
For the current quarter, Dell said it expects revenue to decline slightly from the fourth-quarter level. Analysts are looking for revenue of $15.5 billion in revenue.
For the fiscal year, Dell said it expects revenue to grow 5 percent to 9 percent, or about $64.6 billion to $67.0 billion. Analysts are forecasting annual revenue of $64.2 billion.
Shares jumped 74 cents, or 5.3 percent, to $14.65 in aftermarket trading after the earnings were released. In the regular session, the stock lost 18 cents to $13.91.
Jessica Wilson/ KETKnbc.com