Profit at Dell increased about 27% to 37 cents a share versus $731m, or 28 cents, last year. Revenue rose 16% to $13.4bn for the quarter ended April 29, in what is typically a tough quarter for PC makers.

In part, cheaper PC components during the quarter helped the strong results, which were bang on with analysts’ expectations.

Overall, Dell is executing well on its newer, non-PC units, but the Austin, Texas-based company has a long way to go.

Dell is more US-centric than any other large PC vendor, said Roger Kay, analyst at research firm IDC. And if you look at where the growth is, it’s outside the US.

While Dell touted revenue growth outside the US, which rose 21% year-over-year, its overseas business still makes up less than half (42%) of all sales. That’s more than Hewlett-Packard’s 62% and Lenovo Group Ltd’s 73% in the first quarter, said IDC.

For Dell, the Americas drove $8.56bn worth of sales, a mere 14% increase from last year versus EMEA’s 20% growth (to $3.17bn total) and Asia Pacific and Japan’s 19% (trailing at $1.65bn.)

The company plans to continue to diversify its offerings and geographies, he said in a conference call, in order for strategically targeted growth.

Still, the company mostly depends on its commodity PC business, points out analyst Kay. The company was quick to show that global sales of storage systems grew 49%, but all its non-PC products combined don’t even account for half all its sales, said Kay (who, unlike Dell, puts its notebook sales in the PC bucket.)

What’s more, the PC market in the US is the world’s slowest-growing, projected to rise just 7.6% this year from last versus 10.9% in Asia Pacific and 9.4% in Western Europe, said IDC.

And Dell now faces a new type of competition in Lenovo, China’s largest PC maker, which bought IBM’s PC unit for $1.8bn last month. Dell chief executive Kevin Rollins down played the threat.

Particularly on the IBM-Lenovo end, we are seeing significant opportunities in the large account space in Western Europe and in the Americas, he said in a conference call. We think it’s a significant opportunity for us.

However, while it remains to be seen how effective Lenovo-IBM is going to be as a competitor, Kay said, I wouldn’t count them out yet. Lenovo will be tough to compete against in China and are a formidable rival in non-US markets, he said.

The IBM merger may negative affect Lenovo’s position in the short term, IBM’s PC unit may emerge as stronger rival without the shackles of Big Blue’s bureaucracy, Kay said. And in the tough, street-fighting business, like the PC markets are, it helps to be nimbler and lighter.

The jury is also out on whether No. 2 PC maker Hewlett-Packard’s new chief, Mark Hurd, will be able to turn around its ailing PC business that is barely profitable.

Looking ahead, Dell said it expects second-quarter fiscal 2006 to produce a revenue increase as much as 18% to $13.6bn to $13.8bn and earnings of between 37 to 39 cents. Analysts had hoped for earnings of 38 cents a share on sales of $13.6bn.