DALLAS -- The Dell Computer Corp. reported yesterday that its spectacular pace of growth continued in the fourth quarter, with sales and net income more than doubling from levels a year earlier.
The company's sales also more than doubled for the fiscal year that ended Jan. 31, rising to $2 billion.
The results were close to projections announced by Michael S. Dell, founder and chairman of the company, in February when the company, based in Austin, Texas, was preparing to sell four million shares of stock. The results were also close to those announced two weeks ago, when Dell abandoned the stock offering and established a $200 million credit line from several banks instead.
Investors responded favorably to Dell's announcement yesterday, sending its stock up $1.375, to $35, in NASDAQ trading yesterday. The stock had gained $3.125 Monday.
Charles Wolf, an analyst at the First Boston Corp., said Dell's shares were benefiting from sentiment that a pricing war in the industry had eased. On Monday, Compaq Computer had announced price reductions of up to 15 percent on its new machines, but analysts said the cuts did not constitute a renewed price war, which has driven the PC industry's profit margins down and worried investors.
Mr. Wolf said that during a telephone conference call with analysts yesterday, Mr. Dell remarked: "We're pricing rationally."
Investor concerns about an investigation by the Securities and Exchange Commission into Dell's currency trading practices as well as Dell's expectation of thinner profit margins this year have lately obscured one of the great growth stories in American business.
Started nine years ago as a mail-order company in Mr. Dell's dormitory room at the University of Texas, Dell Computer is now anchored as the world's fourth-largest maker of personal computers, after IBM, Apple Computer and Compaq.
Net income in the fourth quarter was $31.3 million, or 77 cents a share, compared with $15.4 million, or 41 cents a share, in the quarter a year ago. Sales soared to $620.3 million from $285.7 million.
In the fiscal year, Dell earned $101.6 million, or $2.59 a share, compared with $50.9 million, or $1.40 a share, the year earlier. Sales more than doubled for the fourth year in a row, to $2.01 billion from $890 million.