Boosted by the increase in sales on the enterprise and government front, the second quarter profit of Dell Inc., has gone by.

But, despite this, the margins of the IT Company are down and that is making the investors worry.

Texas-based company said that the number of orders of the federal government and the businesses has gone up during the quarter and is expected to go up in the next quarter as well. It also said that the refresh cycle is underway and that demand will continue to rise in various quarters.

The gross margins, however, shrank by a whopping 16.6 per cent because of the higher component costs.

Reports say that a rough period is coming up for Dell. There are also allegations that the company has reported profits in an incorrect way. Besides the company has also paid fine to SEC because of the same charges.

World's third largest PC maker posted a profit of $545 million or 28 cents a share. This is higher than $742 million or 24 cents in the previous year.

It expects the revenue to go up by 14-19 per cent in the coming quarter.