Dell Slogs Ahead Amid Tech Slump

Dell (DELL Quote) delivered on profit in its fiscal first quarter, but weaker-than-expected sales suggest a rebound in IT spending remains elusive.

The Round Rock, Texas-based computer maker posted an adjusted profit, excluding one-time items, of 24 cents a share. That compares with pro forma earnings of 38 cents a share in the year-ago period and was a penny better than the 23 cents analysts were looking for, according to First Call.

Sales for the quarter ended May 1 were $12.3 billion, down 23% from the $16.1 billion level a year-ago. Analysts had been looking for sales of $12.6 billion.

Dell saw sequential and year-over-year sales declines in all areas, with the biggest declines in network storage equipment and desktop PCs.

Looking ahead, Dell said it sees mixed signals on global IT demand and finds the "broader environment is still challenging."

But Dell CEO Michael Dell was optimistic in a press release.

"We're preparing for what we believe will be a powerful replacement cycle, with virtualization and managed services playing larger roles in what customers want and Dell provides," Dell said in the release.

Dell shares rose a nickel to $11.53 in afterhours trading Thursday.