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Dell's fiscal second-quarter earnings fell 17 per cent year-on-year, even as revenue topped $16 billion, the company revealed last night.

The company's revenue grew 11 pe rcent in the quarter ended 1 August, led by a 28 per cent gain in the global consumer business and growth in laptops, which brought in 26 per cent more revenue than a year earlier. However, revenue in both categories was down slightly from the second quarter.

Dell reported net income of $616 million, down 17 per cent from $746 million a year earlier. Earnings per share declined to $0.31 from $0.33.

In comparison, ever-ascendant Apple last posted revenue of $7.46 billion for net quarterly profit of $1.07 billion for the quarter ended June 28, 2008, and is widely expected to reveal yet more record results in the current quarter, and is attracting wide attention from the enterprise markets for the first time.

The huge PC and server maker saw continued economic weakness, particularly in the US and Western Europe, said Brian Gladden, senior vice president and chief financial officer, on a conference call with reporters after the results were announced on Thursday.

Dell used aggressive pricing to gain a stronger foothold in Europe, eating into its margins, Gladden said. But the company continues to reduce its costs and expects to complete its workforce cutbacks in the current quarter, he said.

Revenue rose to $16.4 million from 14.7 million a year earlier. In addition to the large gain in mobility revenue, the services business saw growth of 14 per cent and storage revenue was up 11 per cent.

Revenue from servers and networking gear increased just 5 percent, but Dell said that was nearly twice the growth rate for that industry segment. Only the desktop PC business had lower revenue, with a dip of 5 per cent from a year earlier.

Unit sales grew much more - 44 per cent for laptops and 19 per cent for servers - but average selling prices were down significantly from a year earlier.

Dell said it outperformed its major competitors in all regions and gained market share in all major product categories. The company also said it regained its lead position in flat-panel displays.

Customer interest in cloud computing, which uses a scalable, distributed infrastructure to deliver IT capabilities as services, is helping to drive broad-based increases in demand from enterprises, executives said.

For the remainder of the year, Dell expects to see continued conservatism in IT spending in the US, spreading somewhat to Europe and Asia.

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