updated 5/12/2005 7:54:01 PM ET 2005-05-12T23:54:01

Dell Inc. said first-quarter earnings rose 28 percent from a year ago on strong international sales, and forecast higher revenue growth in the second quarter.

Dell, the world’s largest direct-sale computer vendor, said net income grew to $934 million, or 37 cents per share, in the three months ended April 29 from $731 million, or 28 cents per share, a year ago. Revenue rose 16 percent to $13.39 billion from $11.54 billion last year, driven by international growth and sales of strategic products and services.

The results, announced after markets closed Thursday, were in line with the forecast of analysts surveyed by Thomson Financial for earnings of 37 cents and sales of $13.42 billion.

Dell said sales outside the U.S. increased 21 percent from a year ago and grew to 42 percent of the company’s total revenue. Worldwide revenue from storage systems increased 49 percent and sales of mobility products grew 22 percent from a year ago.

Revenue in Europe was up 20 percent, while the company’s Asia-Pacific and Japanese markets saw 20 percent growth. That compares to 16 percent in the United States, which CEO Kevin Rollins described as a healthy but not explosive market.

“The U.S. had an excellent quarter, we’re quite happy,” he said.

For the first time, Round Rock-based Dell broke out its revenue into six product categories, reflecting the company’s push to expand beyond desktop PCs and corporate computer systems.

Revenue from desktops, which still account for 40 percent of Dell’s business, fell 5 percent from the previous quarter but still grew 6 percent year-over-year to $5.3 billion.

The mobility category, which includes laptops and handheld organizers, jumped 22 percent from a year ago to $3.3 billion. The services and peripherals category, which includes printers and televisions, accounted for $2 billion in revenue, up 29 percent from the previous year.

Rollins said Dell has maintained profitability despite a shifting tech landscape that has seen executive shake-ups at Hewlett-Packard Co. and the purchase of International Business Machines Corp.’s personal computing division by Lenovo, China’s top computer maker.

“It’s not a market phenomenon but a winners or losers phenomenon,” said Rollins. “This environment is ideal for our model and plays into the strength of our strategy.”

Last month, he announced during the company’s annual analysts meeting that he expects Dell to become a company with annual sales of $80 billion in another three to four years.

One analyst wasn’t surprised by Dell’s seemingly unending profitability, which has been driven by grabbing market share from rivals and measured expansion into lucrative new product categories.

“It’s an execution machine, that’s all there is to it,” said Barry Jaruzelski, management consultant at Booz Allen Hamilton. “They’re an operations company, and they stay incredibly true to their operating model.”

The company forecast second-quarter earnings per share of 37 cents to 39 cents, and predicted that revenue will rise 16 percent to 18 percent to between $13.6 billion and $13.8 billion. Analysts are expecting second-quarter profit of 38 cents per share on sales of $13.64 billion. Second quarter earnings will be announced Aug. 11.

Dell said it spent $2 billion in the first quarter to buy back more than 50 million shares. In the past year, the company has reduced the number of outstanding shares by more than 80 million.

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