Dell Fails to Delight

Updated from 4:42 p.m. EST

SAN FRANCISCO -- Dell(DELL) grew its bottom line 27% in the third quarter, but the PC makers' first public discussion of its comeback plan left investors feeling cold.

Rising operating expenses and weakness in its U.S. consumer business belied Dell's talk of restructuring and refocusing the company for growth.

And while Dell executives were vague about the financial outlook -- promising only to "grow faster than the industry" -- their comments suggested the road to recovery will be long and bumpy.

"There's more work to be done and our results will not be completely linear," CEO Michael Dell said in a post-earnings conference call.

Big Day for Dell? Hard to Say

Shares of Dell, which were up in the two days prior to Thursday's earnings report, plunged 10%, or $2.83, to $25.31 in extended trading.

In the three months ended Nov. 2, Dell grew its revenue 9% year-over-year to $15.6 billion, ahead of the $15.3 billion expected by analysts.

Dell reported net income of $766 million, or 34 cents a share, vs. $601 million, or 27 cents a share, at this time last year.

Excluding items, the company earned 35 cents a share, meeting analysts' consensus estimate.

The company's operating profit rose to only 5.3% of revenue from 5.1% a year ago, while its income tax rate dropped in the quarter to 18.2% from 24.9% a year earlier.