Gateway 2000, the US computer giant with its European headquarters in Dublin, said yesterday its second quarter sales had risen 23 per cent, to $1.39 billion (£946 million), from $1.14 billion in the 1996 period. Net profits also rose, by 10 per cent, to $56.6 million from $51.4 per cent, Gateway said.

Although the company declined to provide significant revenue or profit figures for its European operations - which are based in Dublin and employ some 1,600 people - Gateway said shipments within Europe had "increased 47 per cent" over the second quarter of 1996. Shipments to the Asia-Pacific region jumped 90 per cent.

"As we indicated last month, we anticipated that the quarter would come in like a lamb and go out like a lion, and we built inventories and infrastructure accordingly," said the company's chairman and chief executive, Mr Ted Waitt.

He said demand had not accelerated as fast as the company had expected until the end of the quarter, and this had resulted in higher than desired inventory levels.

Unit shipments of portable computers in particular had soared, Gateway added, advancing 112 per cent, a historic high of 12.5 per cent of revenues for the quarter.