* Q1 EPS ex-items 24 cents vs Street view 23 cents

* Q1 rev $12.3 bln vs Street view $12.7 bln

* Shares up 1.4 pct in extended trading

* Sees "challenging" environment, no improvement in May (Adds CEO and CFO comments; byline)

By Bill Rigby

SEATTLE, May 28 (Reuters) - Dell Inc (DELL.O: Quote, Profile, Research), the world's No. 2 PC maker, narrowly beat analysts' expectations for sharply reduced profit on Thursday, even as the global downturn hit technology spending, helping its shares rise after hours.

The company gave little comfort to investors looking for signs of a quick turnaround, saying there was not enough momentum in the PC market to call a bottom yet. But it held out hope for a surge in sales next year as corporations replace their computer systems.

Dell did not give any detailed financial outlook. Last week, larger rival Hewlett-Packard Co (HPQ.N: Quote, Profile, Research), which also reported lower quarterly profit, forecast a 4 percent to 5 percent dip in fiscal year revenue.

Dell said net income fell to $290 million, or 15 cents a share, in the fiscal first quarter ended May 1, from $784 million, or 38 cents a share, in the year-ago period.