After recent declines, demand for Dell products is ‘stabilising', the company has said.

The computer maker also expects a "modest decline" in gross margins, however, due to higher component costs and a competitive pricing environment, Chief Financial Officer Brian Gladden said in a statement. Gross margins provide a measure of how profitable a company is after its costs of doing business.

"We continue to believe that customers are deferring IT purchases, and that we will see demand return to more typical levels at some point," Gladden said in the statement.

Dell's revenue has declined sequentially for each of the past three quarters amid the worldwide recession.

Its revenue in the first quarter fell to $12.3 billion (£7.5 billion), a 23 percent drop from the same period a year earlier. Net income fell to $290 million from $784 million on lower PC sales and restructuring charges.

Dell remains focused on cutting costs in a "still-challenging operating environment," Gladden said on Monday. Dell has said it wants to reduce its annual costs by around $4 billion by the end of fiscal 2011.