Business

Dell shares rise 12% after profits almost treble

Shares in Dell closed almost 12% higher after the PC-maker announced that its profits had almost trebled.

The company said its fourth-quarter net income had risen to $927m (£573m), up from $334m in the same quarter a year earlier.

That helped boost full-year net income to $2.6bn, against $1.4bn in 2009.

The falling price of components helped Dell, as did companies replacing IT equipment - a sign of returning confidence among businesses.

Revenue from both small and large business customers rose by 12% compared with a year earlier.

The growth was particularly strong in the Brics countries - Brazil, Russia, India and China - where revenues increased by 21%. They now represent almost one dollar in every seven Dell makes.

Growth in Europe and the Americas lagged behind at 3%.

Positive outlook

"I'm very pleased with... the strong performance we're seeing in our commercial businesses," said chairman and chief executive Michael Dell.

The company predicted that its revenues would grow between 5% and 9% in the current financial year - faster than some analysts had been expecting.

But some questioned whether this would be possible.

"Dell's positive outlook is a plus for its suppliers' businesses, but their share price will still be weighed on by rising costs and thinning margins," said Andrew Deng of Taiwan International Securities.

"I think they did a good job," said analyst Brian Marshall at investment bank Gleacher & Co. "My only issue is the sustainability of that improvement."

Consumer revenue was down by 8% compared with the final quarter a year earlier. Dell said this was because last year's figures had been boosted by the launch of Windows 7.

The performance of its new Inspiron duo, which combines a tablet and a keyboard laptop, will be key to its consumer division in the coming year.

Dell has been attempting to shift the company focus away from the slowing market for PCs and towards data storage services and cloud computing.

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