CNBC.com Dell Earnings

Dell's bottom-line beat during the third quarter is raising a lot of eyebrows; almost as much as the company's dismal revenue number. So what's going on?

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[DELL  Loading...      ()   ] reported 37 cents a share in earnings, compared to the 31 cents that analysts were anticipating. Pacific Crest Securities was expecting something around 28 cents because of what was widely believed to be a grim revenue number.

Those fears were certainly realized when Dell announced revenue of $15.16 billion, well over $1 billion below the consensus of $16.2 billion. Pacific Crest was at $15.5 billion and the company's latest quarter pales against the $15.6 billion Dell reported for its third quarter last year.

So why such a tale of two spreadsheet columns? Dismal revenue but robust EPS? The company in its release points to a surprising sign of strength and it comes from its consumer division. The company's Global Consumer business enjoyed a 10 percent increase in revenue on a 32 percent jump in unit shipments. The company says the unit grew at twice the rate of the overall industry.

Operating income there was $112 million or 4 percent of revenue, compared with a loss a year ago. Dell says that's the highest level of profitability for this business in 13 quarters, thanks in large part to a 24 percent reduction in operating expenses, including lower product and component costs.

• Read More: Dell Profit Rises, Beats Forecasts; Shares Jump

Look for that news to get a lot of attention on the company's conference call. Remember that Dell no longer offers any meaningful guidance so analysts and investors will be forced to read the tea leaves a little. Dell shares reversed the day's red ink moment after the news hit the wires. The company still sees softness among its global enterprise customers, but the good news for investors: the company's aggressive cost-cutting measures, including the layoff of well over 8,000 workers seems to be gaining traction on the balance sheet. Dell says the steps have helped lead to an 11 percent, year-over-year reduction in operating expense dollars.

This is a company hardly out of the woods, but unlike others in its same position, it's clear that management's strategy to cut costs is having a direct effect on Dell's bottom-line.

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