Dell Exceeds Estimates After Farming Out Production

Dell Inc., the world’s second- biggest maker of personal computers, topped profit and revenue estimates yesterday after slashing costs by contracting out production. The shares rose the most in almost nine months.

Dell’s second-quarter profit was 28 cents a share, excluding some expenses. Analysts had predicted 22 cents on average, according to a Bloomberg survey.

Chief Executive Officer Michael Dell, on a quest to save $4 billion a year, has farmed out 40 percent of the company’s manufacturing. That helped Dell achieve an 18.7 percent gross margin -- the percentage of sales remaining after the cost of production -- beating analysts’ estimates. The company also saw a pickup in sales of server computers, storage devices and low- cost notebooks.

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- Posted: 2009-08-28 09:16:57

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