Dell

(DELL) - Get Report

blew past Wall Street's revenue estimates in its fiscal second quarter, but the company's efforts to stoke sales dented the bottom line, pushing net income down 17%.

Dell said the profit pressure was a result of decision to expand its sales to consumers across the globe as well as to customers in the Europe, Middle East and Africa region by cutting the prices of many of its products.

"Strategic actions to accelerate growth in certain areas of our business affected gross margins this quarter and there will likely be some non-linearity in the improvements in our operating income margins as we rebalance our portfolio, make cost improvements and drive growth," said CFO Brian Gladden in a statement.

Shares of Dell were off 10%, or $2.51, to $22.70 in extended trading Thursday.

In the three months ended August 1, Dell had sales of $16.4 billion, up 11% year-over-year and ahead of the average analyst expectation of $15.9 billion, according to Thomson Reuters.

Sales of notebooks -- the fastest growing segment of the PC market -- were up 26% year-over-year to $4.8 billion, roughly matching the growth rate posted by rival

Hewlett-Packard

(HPQ) - Get Report

, which reported its quarterly earnings results earlier this month.

Founder Michael Dell, who returned to the CEO job last year, told analysts in a post-earnings conference call that the company has "reignited growth" in the PC business.

Since Dell's return, the company has upended many of its business practices, including for the first time making its PCs available for sale through retail outlets like

Best Buy

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and

Wal-Mart

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.

Earlier this month, Dell introduced the first redesign of its Latitude business notebook PC in 5 years, melding a slew of innovative and eye-catching features into the product.

The re-invention has boosted Dell's top-line growth, after a period in which the once-dominant PC maker appeared to be falling behind rivals like H-P,

Lenovo

and

Acer

.

But Thursday's results demonstrated that Dell's newfound revenue growth is not yet falling through to the bottom line.

Dell posted net income of $616 million, or 31 cents a share, a sharp drop from the net income of $746 million, or 33 cents a share, that it earned at this time last year.

Dell said its earnings included $52 million in restructuring and amortization costs, equal to 2 cents a share. Even after backing those costs out, however, Dell fell short of the Street's EPS expectation of 36 cents.

The latest results

underscore the tug-of-war between Dell's operating profit margin and its gross profit margin that has become evident as Michael Dell strives to turn the company around.

While Dell has taken various steps to keep its operating expenses in line, the PC maker's gross profit margin is under pressure by the move to retail and by price cuts designed to grab market share.

Dell's gross margin was 17.2% in the fiscal second quarter, vs. 20% at this time last year, and 18.4% in the previous quarter.

Dell executives pointed to price cuts in the Europe, Middle East and Africa region, particularly on notebook PCs.

"Whenever you're restarting growth, it's an imprecise process," CFO Gladden said during the conference call. "We certainly see some parts of our business where we were too aggressive and we're modulating that now."

Gladden also said that Dell' s earnings were negatively impacted by deferred revenue from sales of technology services in the European market, which will be recognized in future periods.

As usual, Dell did not provide specific financial guidance for the current quarter. But the company noted that the continued "conservatism" in U.S. technology spending has spread to Western Europe and several countries in Asia.

Dell said it expects to benefit from its improving performance in areas such as emerging countries, notebook PCs and technology services, which Dell said have diversified its business. And Dell said it continues to work aggressively on "cost initiatives."

The company said it will attain its goal of reducing headcount by 8,900 employees in the current quarter.