Tonight's story stock is Dell Inc (NASDAQ:DELL). If you pay any attention to business news you will certainly be hearing a lot about the company tonight and during the day tommorrow. The company reported its second quarter earnings today after the closing bell, and the results were quite positive. The company reported second quarter revenue of $14.8 billion, ahead of analysts expectations of $14.6 billion . The company earned 32 cents per share in the quarter, a penny better than the consensus estimate from analysts and far better than last year's result of 22 cents per share. The company would have beat earnings estimates by an even greater margin, but the company had expenses of 3 cents per share, 
stemming from paying employees for retired stock options. DELL shares are higher by 10 cents, or 0.35% in after hours trading after this news.
Dell is not the first personal computer maker to experience a nice turnaround. Earlier this month one of its main rivals, Hewlett-Packard Company (NYSE:HPQ) delivered impressive earnings results as well.
What drove the second quarter earnings at Dell? The primary reason for the higher earnings is a huge drop in component costs. The cheaper components was quoted as the main reason behind HPQ's earnings beat just a few weeks ago as well. GrowYourFunds also covered HPQ as a story stock after its earnings two weeks ago.
The question for Dell now becomes, what can it do to differentiate itself from its competitors? The lower component prices will only help results for so long. In fact, in a statement later tonight a Dell spokesperson said that they do not believe the component cost declines are sustainable.
The earnings news was not all rosy for the company, as margins decreased quickly at Dell this quarter. Operating margins fell to 6.0% from 6.5% at the beginning of the second quarter. Dell still has many questions to answer, as it once again skipped the post-earnings conference call as the company finishes up an accounting review, which will result in up to $150 million in restatements.
Dell certainly had a better quarter, but it still has many questions, and competitors still seem farther along in their turnarounds. The company has improved its profit picture, but it still has a lot to prove.
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