Page last updated at 22:30 GMT, Thursday, 29 May 2008 23:30 UK

Dell signals 4% growth in profits

Michael Dell
Michael Dell founded the firm when a college student

Dell, the world's second largest PC maker, has said that latest profits and sales figures suggest efforts to turn around the firm may be paying off.

Profits in the three months to 2 May beat analysts' expectations, rising 4% to $784m (396.7m) on sales up 9%.

Growth of commercial and consumer products, and lower operating costs, had helped results, the firm said.

Dell leads Hewlett Packard in the US, but observers say that this could make it more vulnerable to a US slowdown.

The firm has previously said that it need to create products and services that would appeal to first-time users in India, the Middle East and China.

And as it announced results, it said it was joining the burgeoning ranks of companies offering cut-down laptops, called netbooks, aimed at the developing world and general consumers.

Dell shares climbed 8% on the back of its results.

Model changes

Michael Dell returned as chief executive in 2007 after the company he founded as a college student was overtaken by HP.

Last month Mr Dell told the BBC that his firm could regain its spot as the world's number one PC maker by switching its focus to consumers and the developing world.

"We're growing faster than our industry," he told BBC News, "so if you keep on doing that for long enough time, you'll certainly get there."

Dell built its reputation and profits on just-in-time production of computers ordered direct by customers rather than sold through stores.

However it is adjusting that model - by getting its computers into more shops.

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