Internet sales boost Dell profit

Dell has posted a 42 per cent rise in profit for the first quarter, generating nearly one third of its business from online sales.

For the quarter ended 30 April, the direct manufacturer reported net income of $434 million or $0.16 per share, compared with $305 million or $0.11 per share a year earlier. Revenue for the period exceeded $5.5 billion, up from $3.92 billion.

Michael Dell, chief executive of Dell, said industry demand for the quarter was solid and added that sales via Dell's Website surpassed $18 million per day during the period, accounting for 30 per cent of overall revenue.

Dell has admitted that not all sales are actually taken online - much of the revenue is from products viewed online.

'We're increasingly applying the internet to the entire business - from component design to user support - making it easier to do business with Dell, enhancing relationships with customers and suppliers and reducing costs,' he added.

'We believe that we are doing this to a much greater degree than anyone else in our industry, and it is already a compelling difference in winning customers of all types,' he claimed.

Dell said the results were driven primarily by strong sales of servers and PCs to consumers. He added that he believed PC demand continued to be strong, in contrast to rival Compaq's statements earlier this year.

'For companies with effective, efficient business models, this industry remains healthy,' he said. 'We continue to see significant opportunity for expanding our business profitability.'

He said Dell's revenue from enterprise systems surged 97 per cent from last year, increasing to 16 per cent of total company sales.

Meanwhile, HP outlined its internet plans last week, launching e-speak - see page 10.