Last Update: 5:49 PM ET Nov 21, 2006
SAN FRANCISCO (MarketWatch) -- Dell Inc. reported a third-fiscal-quarter profit Tuesday that was up almost 12% from a year ago, and shares rose as much as 11% in after-hours trading as the computing giant's earnings results beat the consensus forecast of Wall Street analysts.
Dell, however, called the results preliminary and subject to change as it faces an ongoing probe by federal securities regulators into its accounting practices.
DELL24.82, +0.17, +0.7%) said net income for the period ended Nov. 3 rose to $677 million, or 30 cents a share, from $606 million, or 25 cents, in the year-ago quarter. Analysts surveyed by Thomson First Call were expecting earnings of 24 cents a share.
Gross margins as a percentage of revenue climbed to 17% from 16.2% a year ago. Revenue rose 3.5% to $14.38 billion, up from $13.91 billion but slightly lower than the $14.44 billion expected by analysts.
Revenue looked to be in line with expectations, but earnings per share were "much better," said Shaw Wu, an analyst with American Technology Reseach. "
it looks like margins bottomed last quarter and Dell is making progress." Wu hold a neutral rating on Dell's stock.
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