Dell Inc, the world's second largest personal computer maker, said its profit and sales grew in its first quarter citing stronger consumer demand and lower operating costs and beat Wall Street's expectations.

The Round Rock, Texas-based company said its net income rose 3.7 percent to $784 million, or 38 cents a share, from $756 million, or 34 cents, a year earlier. Revenue was $16 billion, up 9 percent from $14.72 billion a year earlier.

Analysts, on average, had expected a profit of 34 cents per share on sales of $15.68 billion, according to a poll by Thomson Financial.

The results are early signs'' of a turnaround, Chief Financial Officer Donald Carty said on a conference call today.

Dell said product shipments increased 22 percent in the quarter, driven by a 43 percent surge in unit sales of laptop computers.

The company cited strong growth of commercial and consumer products and services and lower operating costs as a percentage of sales which helped drive the company's better-than-expected results.

Chief Executive Officer Michael Dell has spent the past year creating partnerships with retailers such as Wal-Mart Stores Inc. in a bid to help narrow the gap with Hewlett-Packard Co., which has led PC shipments for seven straight quarters.

The company also did well abroad, with sales up 19 percent in Asia and revenue from Europe, the Middle East and Africa advanced 15 percent. Sales from countries including Brazil, Russia, India and China surged 47 percent, Dell said.

Around 60 percent of Dell's revenue came from the Americas in the fourth quarter, the company said. Meanwhile, rival Hewlett-Packard gets two-thirds of its sales outside the U.S., making it less vulnerable to economic slowdowns in that country. Dell said it plans to get about half its sales from overseas by 2009.

Michael Dell Dell