Dell says third-quarter profit has risen 21 per cent as the computer maker held down costs and posted strong sales of server computers and data storage machines.
Revenue at the Texas-based company jumped more than expected as business spending on technology increased.
Dell, which undercuts rivals on price by selling directly to customers, said it gained market share and forecast that sales during the important holiday season would beat expectations.
Company chief Mr Michael Dell, said companies are starting to replace outdated personal computers. "There are a number of corporations that have an installed base of machines that are four years old and plus, and they've come to a point where they need to replace them. We've seen these wins start to occur," Mr Dell said.
But Dell, whose market share gains bumped Hewlett-Packard down to the number two spot earlier this year, also said big corporations have more cautious than other customers.
Dell, which gets most of its revenue from PCs, has been expanding into consumer electronics, attacking new markets with its well-known low-margin sales tactics. In addition to printers and handheld computers, it sells digital music players and flat panel televisions.
Dell said total revenues rose to $10.62 billion from $9.14 billion a year earlier. Analysts had been expecting the company to report revenue of $10.52 billion.