US computer giant Dell Computer has beaten analysts' expectations by reporting sales of more than $8bn (�5.6) during the three months to 1 February.

As anticipated, Dell reported net earnings of $456m, compared with $434m last year, the company said in a statement.

Sales strengthened towards the end of the year as consumer spending on PCs remained strong in the face of a US recession, though companies failed to spend on technology, Dell said.

Market weakens

Dell predicts that global sales will fall 10% during the February to April quarter compared with the previous three months.

The company said this would reflect a seasonal softening in demand for PCs from consumers.

Even so, the company expects to perform better than its competitors.

A 10% fall in sales would bring first quarter sales for 2002 down to about $7.8bn, above predictions of $7.6bn.

Dell shares gained shares closed at $26.81 on the Nasdaq ahead of the results, down 3.4%.

Industry in trouble

Dell's gloomy predictions for the PC industry came as no surprise.

Consumers and companies alike have deserted computer makers during the US recession.

An aggressive price war, led by Dell, hit the bottom lines of all PC makers, but it enabled Dell to gain a larger share of a shrinking market.

The company increased its market share globally by almost 3% from a year earlier, Dell said.

And during the last few months of 2001, PC demand from consumers turned out to be much stronger than anyone had expected.

But demand from businesses remained low and is not expected to pick up as long as the US recession lasts.