Net income rose to $677 million, or 26 cents a share, from $561 million, or 21 cents, a year earlier, the Round Rock, Texas- based company said in a statement. Sales in the period ended Oct. 31 gained 16 percent to $10.6 billion from $9.14 billion.

Chief Executive Michael Dell has boosted sales for seven straight quarters by winning business and consumer PC purchases with lower prices and by adding new product lines such as storage devices, cash registers and printers. Sales from the enterprise unit, which includes the new products, increased 32 percent, led by shipments of server computers and storage gear.

``The tech revival is real,'' said Ned Riley, who helps manage about $115 billion as chief investment strategist at Boston-based State Street Global Advisors, which has 72.5 million Dell shares. ``The increase in the enterprise business definitely indicates that they can maintain the revenue pace for at least the next two or three quarters.''

Sales will rise 18 percent to $11.5 billion this quarter, with profit at 28 cents a share. Analysts on average expected $11.2 billion and 28 cents, according to a Thomson Financial survey.

The report arrived unexpectedly before regular U.S. trading had closed. Dell shares fell 3 cents to $35.64 as of 4 p.m. New York time in Nasdaq Stock Market composite trading and then rose to $35.75 in extended trading. They have climbed 33 percent this year.

New Products

Dell has become known for a business model that bypasses distributors and retailers, often letting the company offer PCs and other products at lower prices than rivals.

PC average prices industrywide have fallen 40 percent to an estimated $1,175 this year from $1,972 in 1997, according to Merrill Lynch & Co. That pushed Dell to expand into new areas such as storage devices in 1998, cash registers in January and printers in March.

Dell has set a goal of doubling revenue to more than $60 billion a year, which may happen by 2007 if the company averages 15 percent growth each year. He has said he wants the division that includes the new products to eventually account for about half of sales.

Hewlett-Packard is the world's biggest PC maker, as ranked by units shipped last year, while Dell has shipped more in the first three quarters this year, according to market researcher Gartner Inc.

Analysts on average expected third-quarter profit of 26 cents a share on sales of $10.5 billion, according to a Thomson Financial survey.