Dell came in Thursday with second-quarter earnings of $545 million, or 32 cents a share before adjustments, on revenue up 22% to $15.5 billion, mostly from its commercial customers whose spending increased 28% to $12.7 billion compared to consumers, its problem market, which was flat at $2.9 billion and lost $21 million. Its gross margin dropped from 18.7% to 16.6%.

Analysts forecast 30 cents on $15.2 billion so it beat the Street.

CTO Brian Gladden said results were impacted by "sequential component inflation."

Dell said the overall picture ain't gonna change much.

This quarter, it expects seasonal improvements from federal government sales and commercial businesses, resulting in an uptick in the low single digits. It reiterated that it anticipates revenue growth this year of 14%-19%.

Dell declared the corporate refresh cycle "well underway."

Its server and networking revenues increased 35% showing growth in blades. Storage was up 13% led by its EqualLogic products, up 63%. Services revenue increased 57% to $1.9 billion counting Perot Systems. Revenue in mobility and desktop products grew 21% and 17%, respectively, thanks to the enterprise and SMBs.

Large enterprise revenue accounted for $4.5 billion, up 38%, with revenues for servers, services and mobility improving by more than 50% and income up 68% to $288 million,. Public revenue was $4.6 billion, up 21%. The sector's operating income was $369 million, down 4%.

Asia-Pacific and Japan revenue grew 38% and the Americas and EMEA were up 17% and 24%, respectively. Revenue from outside the U.S. represented 47%.

Business in emerging countries was up 52%, accounting for 12% of Dell's overall revenue.

Cash flow from operations was $1.3 billion, with Dell ending the quarter with $13.1 billion in the bank, but that's before it shells out $1.15 billion to buy 3PAR.