Dell also issued annual revenue guidance for the current fiscal year that beat Wall Street's forecast. The results sent Dell's shares soaring in extended trading after the report was released.
Companies that clamped down on spending during the economic downturn continued to upgrade technology in the quarter. Dell's business is more heavily weighted toward corporate customers than its competitors, so this resurgence in spending is giving it a relatively big boost.
Those increases helped Dell offset sluggish consumer spending on computers. Dell Chief Financial Officer Brian Gladden said he expects the consumer PC business will remain weak this fiscal year, in part because people are thinking about buying tablets such as Apple Inc.'s iPad.
Dell's results bring an extra month's perspective to an earlier report from technology bellwether Intel Corp. The strong corporate spending and the weakening of the consumer PC market that Intel, the world's largest maker of PC processors, observed in the last three months of 2010 continued through January.
For the quarter that ended Jan. 28, net income soared to $927 million, or 48 cents per share, from $334 million, or 17 cents per share, a year earlier.
Excluding certain items, Dell earned 53 cents per share, blowing past Wall Street's expectations. Analysts surveyed by FactSet forecast earnings of 36 cents per share.
Revenue rose 5 percent to $15.69 billion from $14.9 billion in the year-ago quarter. That's less than the $15.75 billion analysts predicted.
Revenue from large enterprises and from small and medium-size businesses rose 12 percent each to $4.7 billion and $3.7 billion, respectively. Public-sector revenue increased 4 percent to $4 billion.
Revenue from the consumer segment fell 8 percent to $3.3 billion. A year ago, Microsoft Corp.'s updated PC operating system, Windows 7, went on sale, luring more shoppers and making for a tough comparison this year.
Dell has been working to increase the proportion of server computers, data storage devices and technology consulting services it sells, because those areas are more profitable than the basic PC business. Compared with a year ago, however, each of Dell's product categories accounted for about the same amount of revenue in the quarter. Computers, both for consumers and for business employees, continued to make up more than half of Dell's revenue.
Dell's gross margin, an important measure of how efficient the business is, clocked in at 21 percent, better than the 18.6 percent analysts were expecting.
Gladden said lower costs for components helped contribute to the stronger gross margin, as did improvements in how the company sources parts and manufactures computers.
"I think they did a good job," said Brian Marshall, an analyst for Gleacher & Co., in an interview. "My only issue is the sustainability of that improvement."
Marshall said Dell's guidance indicates margins will decline this year. Component prices are bound to rise, and Dell remains heavily dependent on selling hardware - PCs and server computers. The company is doing the right thing by making acquisitions in technology consulting and data storage that bring faster growth and better margins, the analyst said.
"The issue is: Dell is yesterday's company. And they're $60 billion in revenue. To turn a $60 billion ship, you can't do that overnight," Marshall said.
For the full year, Dell said net income increased 84 percent to $2.64 billion, or $1.35 per share, from $1.43 billion, or 73 cents per share in the prior year.
Revenue rose 16 percent to $61.49 million from $52.9 million.
For the current quarter, Dell said it expects revenue to decline slightly from the fourth-quarter level. Analysts are looking for revenue of $15.5 billion in revenue.
For the fiscal year, Dell said it expects revenue to grow 5 percent to 9 percent, or about $64.6 billion to $67.0 billion. Analysts are forecasting annual revenue of $64.2 billion.
Shares jumped 80 cents, or 5.8 percent, to $14.71 in aftermarket trading after the earnings were released. In the regular session, the stock lost 18 cents to $13.91.