[R]1:00PM New York – Dell reported sales in the fourth quarter rose 10% from a year ago and 2% from third quarter. Earnings in the quarter rose 6% from a year ago and 11% from the third quarter.[/R]

Revenue Review

Dell Inc, (DELL: chart) the personal computer maker reported fourth quarter 2008 revenue climbed 10% to $15.99 billion from $14.47 billion a year earlier, but profit fell, as the company took a battering from higher one-time expenses.

Dell blamed the results on lost market share, and extended costs targeted at regaining lost customers to major competitor, Hewlett-Packard. Rival, Hewlett-Packard reported in January fourth quarter sales rose 13% to $28.48 billion on stronger international growth, and 38% rise in earnings.

Yet, Dell largely relies on domestic sales, which have come under pressure in recent months, as consumers cut tech spending.

Dell’s 51% revenue originates from the domestic U.S. market compared to HP’s 69% from the international market.

In the quarter, operations outside the U.S performed better. International sales rose 16% and contributed 49% of cumulative revenue. Dell said revenue from the Asia Pacific and Japan region rose 28% and was up 12% in the U.S Consumer business. Revenue gained 8% in the Europe, Middle East and Africa division and increase 7% in the America Business Unit.

During the fiscal 2008, the company said revenue climbed 6% to $61.13 billion compared with $57.42 billion in 2007.

Earnings Review

Fourth quarter net income dropped 6% to $679 million from $726 million a year ago.

Earnings declined 3% to 31 cents per share against 32 cents per share posted in the comparative period in 2007.

The results missed estimates of 36 cents per share and revenue of $16.27 billion, according to analysts polled by Thomson Financial.

Dell said several one-time expenses affected the earnings decline. The company said it wrote-down $83 million in research and development costs related to the purchase of EqualLogic and Everdream.

At least $54 million was spent on business restructuring and severance packages, $27 million for investigation related expenses, $11 million in amortisation costs and $58 million linked to copyright levies.

For the year, net income rose 14% to $2.94 billion or $1.31 per share from $2.58 billion or $1.14 per share in 2007.

Dell generated a positive cash flow of $1.2 billion in the quarter while cash and marketable securities rose $9.5 billion.

Dell resumed its share-repurchase programme during the quarter, and spent $4 billion to repurchase 179 million shares of common stock.

Operating expenses rose 34% to $2.2 billion, as the company adopted new approach aimed at increasing sales.

Dell has started selling through retail outlets, ending a long-standing strategy of direct-to-consumer sales

Chief executive and chairman, Michael Dell said the company will continue reducing costs, and has already eliminated 3,200 jobs as part of its cost-cutting strategies.