Dell Reports Q3 Uptick

The company's $677 profit is up a bit from its fiscal second quarter of 2004 and from the same quarter last year. Servers and storage helped drive the numbers.

Dell Inc. made $677 million on $10.6 billion in revenue for its third fiscal quarter of 2004, with strong results in servers and storage.

The income is up mildly from $621 million on $9.8 billion in the Round Rock, Texas companys second quarter, and also from Dells $561 million on $9.1 billion for the third quarter last year.

"Unit shipments, revenue, operating profit, and earning per share were all company records," said James Schneider, senior vice president and chief financial officer. The earning per share was $0.26, he said.

Dell in the quarter saw 68 percent growth in external storage sales, largely with partner EMC Corp., officials said. More than 7,000 customers have bought the Hopkinton, Mass. companys storage gear, some of which Dell itself manufacturers, they noted.

"Were going to continue to expand" that partnership, CEO and Chairman Michael Dell said, without elaborating. Asked about the potential impact of Gateway Inc.s new and similar partnership with EMC rival Hitachi Data Systems, "I dont have any reaction," he said.

Other highlights for the quarter, compared to the second quarter, were 31 percent growth in shipments of Inspiron and Latitude notebooks, a 20 percent increase in Dimension and OptiPlex desktop shipments, and 30 percent growth in server shipments. Services revenue grew 31 percent, while software and peripherals rose 26 percent. Dell has sold more than one million printers—that business grew nearly 70 percent and is now profitable, they said. Its too early to tell how Dells consumer-electronics sales are faring, they added.

Dell said it expects revenue of $11.5 billion and earnings per share of 28 cents in the fourth quarter, officials said. The companys cash and investments are currently at $11 billion, a company record, they said. ´