Gabriel, thanks so much for the IDC/Dataquest info..RE: 4Q this year...
I, like many, have had concerns about a 4Q slowdown for Dell this year...apparently, Y2K is not going to effect 3Q (much at all), and any significant impact would be felt in 4Q..
Here's where (long-term holders) should have some comfort. The y-o-y comp (at least on the revenue line) are going to be favorable for Dell in 4Q. If you recall, last 4Q was the quarter Dell "only" grew revenues 38%...making it the 1st quarter in which Dell has grown y-o-y at far less than 50%...So, ironically, Dell's "bad" (I use the term loosely) quarter last 4Q may help Dell this 4Q....I did a quick calculation this weekend (don't have it in front of me) but I believe that (assuming Dell grows revs at around 10% this next quarter)...Dell would only to grow revs at around 5% sequentially in the 4th quarter to keep revenue growth at 40%y-o-y (or above)....
As you know, Dell normally grows revenues at/or above 10% sequentially in 4Qs.
So Dell could take a Y2K hit (on the revenue line), and STILL grow revs at near 40% or above in 4Q...
As you may know, Dell is insisting that they do not expect a "different" 4Q this year (due to Y2K), because they expect consumer, small business, and gvt. purchasing to make up for any (large corporate) lockdowns....
NOW...
The earnings line is going to be a bit tricky. Dell's margins expanded quite nicely in 4Q last year...and the extent of which will be hard to duplicate.....so it appears it will be tough for Dell to grow y-o-y earnings much better than 30-35% range in 4Q this year...
NOW...
If you would have told me, at the beginning of the year, that the extent of Y2K trouble for Dell would be a 4Q in which earnings would grow at around 40%, and a 1 quarter earnings growth of 30-35%, I would have been very happy indeed...
I would encourage all those reading to do their own number crunching on this issue, and to remember a lot can change between now and then, but, to date, I feel pretty comfortable about Dell getting thru the period relatively unscathed...hopefully, that will also be reflected in the stock price during the period... |
