Dell Q2 FY2008 results solid despite accounting investigation

Round Rock (TX) - Dell released financial results for its latest fiscal quarter, showing off a 46% gain in quarterly earnings despite a costly investigation into its accounting practices.

Dell’s second quarter for fiscal year 2008 saw $733 in earnings, up significantly from the previous quarter’s $502 million. Total revenue rose about 7% from $14.1 billion to $14.8 billion.

Notebook computers and server sale have bolstered sales throughout the year. Revenue from servers chimed in at around $1.6 billion, up from $1.4 billion a year ago, while notebook PC sales climbed from $3.7 billion to $3.9 billion in the same time. Desktop computer sales, meanwhile, remained flat.

Dell noted better-than-expected sales for its new Inspiron and XPS notebooks, so much so that it was actually hampered by supply constraints. In its report, Dell says it will improve supply issues over the course of the next two quarters.

Operating profit for the quarter was just shy of $900 million. That number was hit hard by extra administrative costs. About $102 million went to what Dell called "expired in-the-money stock options", including a $48.5 million severance payment to fired CEO Kevin Rollins. An additional $59 million cost was attributed to an investigation into Dell’s accounting practices, which came under scrutiny during the quarter.

Because of continue restructuring processes, Dell did not provide a forecast of what the next quarter results might be, saying there are too many unknown variables that will affects its operational results over the next few months.