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Technology Stocks : Dell Technologies Inc.

DELL 138.98

+4.0%

Dec 4 3:59 PM EST

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To: jim kelley who wrote (85775)	12/17/1998 11:05:00 AM
From: rudedog	Read Replies (1) of 176387

Jim - I'm struggling to understand why CPQ would have a problem hitting its old margin targets. Let's see - before the merger, DEC is doing better than 10% pre-tax, CPQ better than 7% after tax. No costs are added, in fact many are reduced. Headcount already down by about 7,000, several facilities closed, and DEC now get's CPQ volumes for their component purchases. So costs should be going down from a cost structure that delivered better than 7% after tax in the past. Also, CPQ can now use the DEC tax loss carry forward to further improve the picture. I have looked at this from several perspectives and it looks to me like at least .40 EPS in 4Q.

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