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Technology Stocks : Dell Technologies Inc.
DELL 119.41-2.7%Nov 19 3:59 PM EST
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To: JRI who wrote (144748)10/18/1999 10:51:00 PM
From: Gabriel008  Read Replies (4) of 176387
 
John, I listened to the conference and recalculated this quarter's eps based on the comments from Meredith.

1- Q3 demand is very strong. In fact, DELL is more bullish than they were 2 months ago.
2- Taiwan earthquake component shortages are solvable in Q3.
3- LCD panel issue is solved due to the Samsung Electronics deal. There will be a marked momentum increase in notebook sales resulting from this.
4- The spike in DRam prices will hurt Q3. In August and September DRam prices increased between 50% to 100% depending on the product. This was absorbable according to Meredith without unduly impacting Q3.
However, DELL was informed last week that DRam prices would increase another 25%. This would increase box prices by an average of $70 to $75 on 30% to 35% of Q3 shipments. This results in approximately $65,000,000 erosion in Q3 margins based on my volume estimates for Q3.
5- DELL is very bullish about Q4 demand.

Q3 EPS Impact:

Units.....3.175 million....to be confirmed with IDC numbers on Friday
ASP.......$2150
Revenue...$6.826 billion
GP........$1.365 billion... 20.0% vs 22.0% in Q2
EPS.......$0.18

My guess is they'll do better than 18 cents - maybe even hit 19 cents - particularly if they are able to improve their product mix sales [i.e., more notebooks] and convince customers to switch from more DRam to additional features for the same price. Incidentally, he sounded really pissed about this unbudgeted DRam price increase. I'm sure something will happen very soon to get this monkey off their backs.

Regards, Gabriel
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