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Last Updated: Thursday, 18 May 2006, 21:56 GMT 22:56 UK
Dell boosted by chip announcement
Dell notebook computer
Dell has cut prices in an effort to maintain sales growth
Dell, the world's largest personal computer manufacturer, has said its first quarter profits fell 18% as growth slowed.

But the Texan-based giant saw its shares rise in after-the-bell trading in New York after saying it would use chips from Advanced Micro Devices(AMD).

Dell is the last major PC maker to use processors just from Intel.

After making the announcement Dell saw its shares climb by 3% and those of AMD put on 13%.

Net income fell to $762m, or 33 cents per share, from $934m, or 37 cents per share, a year earlier. Revenue increased to $14.2bn from $13.4bn.

Dell has cut prices to keep up sales growth, in response to competition from rivals such as Acer and Lenovo.

Its shares have fallen more than 40% in the past year.

In a separate statement Dell and AMD said Dell intends to use AMD Opteron Dual Core chips in multiprocessor servers due out later this year.

Financial Times analysis on future of Dell

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