Dell profit down 23% but surpasses estimate

SAN FRANCISCO -- Dell's second-quarter profit was whacked 23% as the personal-computer industry's slump dragged on this summer. The results beat Wall Street's forecast, however, sending the shares up more than 6%.

Dell's shipments of consumer PCs increased 17% over last year, while revenue in that category was down 9% to $2.9 billion. Price-cutting explains the discrepancy. PC makers have been slashing prices to preserve market share. Consumers also have been favoring little "netbook" laptops that generate lower profit margins for manufacturers.

Dell's sales to corporations fell 32% from last year to $3.3 billion.

Round Rock, Texas-based Dell is especially vulnerable to anemic business spending, because 80% of its revenue comes from corporations, government agencies and other institutions.

Dell's profit was $472 million, or 24 cents a share, in the three months ended July 31. That compares with profit of $616 million, or 31 cents a share, in the year-ago period.

The latest profit figure includes 4 cents a share in pretax expenses connected to Dell's ongoing restructuring.

Sales fell 22% to $12.8 billion.

Analysts polled by Thomson Reuters expected profit of 23 cents a share on $12.6 billion in sales.

The figures were released early, right before the market closed, and Dell stock jumped 6.7% to end regular trading up 98 cents at $15.65.