Dell upbeat as profits double on business segments

Dell doubled profits in the third quarter indicating the firm's fortunes are turning the corner as all operating segments bar consumer posted double digit sales gains. The US PC maker posted income of $1bn, up from $577m a year ago and revenues grew 19% to $15.4bn, albeit lower than analyst expectat

Dell doubled profits in the third quarter indicating the firm's fortunes are turning the corner as all operating segments bar consumer posted double digit sales gains.

The US PC maker posted income of $1bn, up from $577m a year ago and revenues grew 19% to $15.4bn, albeit lower than analyst expectations of $15.42bn and $16.02bn.

"The profitability in our commercial business was driven by improved product margins in our enterprise solutions and services and client hardware businesses," said Dell CFO Brian Gladden.

The Large Enterprise segment grew sales 27% to $4.3bn with the hardware refresh pushing up client revenues 38%, the Public sector unit grew 20% to $4.4bn despite the tougher spending environment in Europe.

Sales in the SMB division were up 24% to $3.7bn with servers and client revenues up 28% and 27% respectively, storage climbed 24% with EqualLogic up 85%.

The vendor said its "direct model gives us an advantage in the mid-market and we have earned a trusted advisor status with our customers."

However growth in consumer was less marked, up just 4% to $3bn but could benefit from a streamlining of the brands to Inspiron, XPS and Alienware, to create a clearer mix of higher-priced band sales.

"We believe we're making strategic progress in improving our consumer business but we still have work to do there," said Gladden.

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