Dell said it earned $749 million, or 29 cents per share, compared with $603 million, or 23 cents a share, in the same quarter a year ago. Analysts surveyed by Thomson First Call had expected earnings of 28 cents a share.
"Much of the industry's quarterly growth was at the low ends of the desktop and notebook categories, which offer little if any profitability," said Kevin Rollins, president and chief operating officer. "Dell met its operating targets by pursuing profitable growth."
While Dell did see growth in desktop and notebook sales, chief financial officer Jim Schneider and CEO Michael Dell indicated that they've seen an increase in corporate spending.
"It sounds like they're seeing a pickup in corporate demand, which is a major positive for 2004," said Alan Loewenstein, an analyst who covers Dell for John Hancock Technology Fund.
Dell's revenue was $11.5 billion, up from $9.7 billion in the same quarter last year.
For the year, the company earned $2.6 billion, up from nearly $2.1 billion in fiscal 2003.
"This is just one more confirmation point that we're in an uptick in technology spending--but not a gangbuster uptick," said Barry Jaruzelski, head of technology consulting at Booz Allen Hamilton. "People are confidently spending, but not going hog wild."
Product shipments in Europe, the Middle East, and Africa rose 33 percent, primarily in the United Kingdom, France, and Germany.
Rollins and Dell said they expect first-quarter fiscal 2005 product shipments to rise more than 20 percent, ahead of anticipated industry growth.
"They continue to execute their model and it's working and as the economic recovery picks up they will definitely benefit and continue to grow faster than the rest of the industry," Loewenstein said.