By Bill Rigby

The company gave little comfort to investors looking for signs of a quick turnaround, saying there was not enough momentum in the PC market to call a bottom yet. But it held out hope for a surge in sales next year as corporations replace their computer systems.

Dell did not give any detailed financial outlook. Last week, larger rival Hewlett-Packard Co, which also reported lower quarterly profit, forecast a 4 percent to 5 percent dip in fiscal year revenue.

Dell said net income fell to $290 million, or 15 cents a share, in the fiscal first quarter ended May 1, from $784 million, or 38 cents a share, in the year-ago period.

Excluding certain one-time restructuring costs, the company posted a profit of 24 cents a share, just beating analysts' average estimate of 23 cents a share, according to Reuters Estimates.

Revenue fell 23 percent from a year ago to $12.3 billion, versus Wall Street's estimate of $12.7 billion. Dell's global PC shipments fell nearly 17 percent in the first calendar quarter, according to data firm IDC.

Shares of Round Rock, Texas-based Dell rose 1.4 percent in extended trading after closing up 3.2 percent at $11.48 on Nasdaq.

POWERFUL CYCLE AHEAD

Dell is focusing on cutting costs in what it called a "challenging" environment, concentrating more on profitability than growth.

In February, Dell boosted its 2011 cost-reduction target to $4 billion from $3 billion. It cut its overall headcount by more than 9,000 jobs last fiscal year, ending with a total headcount of 78,900. It declined to give a new total for the end of the last quarter.

"We don't believe there's enough momentum to call a bottom yet," Dell Chief Financial Officer Brian Gladden said on a conference call. He added that there was "no real improvement" in business conditions in May.

Chief Executive Michael Dell predicted a rise in PC sales next year, as corporations update their systems, taking advantage of new Intel Corp chips and Microsoft Corp's upcoming Windows 7 operating system.

"We're preparing for what we believe will be a powerful replacement cycle," said Dell on the call. "There's a number of other factors that could ignite a powerful refresh cycle and that's what we're playing for."

(Reporting by Bill Rigby; Editing by Richard Chang and Tim Dobbyn)