Dell Computers' profits surge by 30% to $561m during third-quarter

DELL COMPUTERS, employing 4,700 in Ireland, reported a 30% increase in net income for the third-quarter yesterday and is expected to announce more good news concerning it Irish operation on Monday.

The world's biggest seller of personal computers for the four months ending November 1, Dell posted net income of $561 million, or 21 cents a share, compared with profit of $429 million, or 16 cents a share, a year earlier.

The company employs 4,700 people in Ireland and are recruiting staff in Limerick where new storage devices built to an EMC design are to be built.

There is also speculation that on Monday, Dell will announce the company's handheld PDAs (personal digital assistant) are to be manufactured in Limerick also.

Dell's revenue rose 22% to $9.14 billion from $7.47 billion in last year's third quarter.

Dell's third-quarter results were in line with analyst projections, according to Thomson First Call, making it the seventh straight quarter Dell met or exceeded expectations.

Dell expects fourth-quarter earnings of 23 cents a share and revenue of $9.7 billion, also in line with analyst expectations. The company's Chief Financial Officer Jim Schenider said earnings could come in a penny higher if industry demand exceeds expectations. Dell is targeting 10% sequential growth in shipments in the fourth quarter.

While the computer market has been suffering from a protracted slump in demand, Dell has been able to boost its sales and gain market share. The company, the king of the direct business model, recently reclaimed the title of the world's largest PC maker from Hewlett-Packard Co. (HPQ).

But even though Dell reported an increase in net income, investors reacted somewhat negatively to the company's results and outlook.

George Elling, an analyst at Deutsche Bank, said investors were disappointed because in the last few quarters Dell has been able to exceed results and expectations for its outlook.