BUT LOOK AT WHAT THEY ARE SAYING COMPARED TO DELL:
"Gateway expects to report fourth quarter revenue of $2.45 billion, up 6 percent year-over-year. The company blamed the shortfall on a combination of chip and motherboard shortages..."
Dell has been consistent with analysts this time around is stating they've not experienced shortfalls in supply for either chips or motherboards. What has been short they've been able to meet through other suppliers. YET, WHILE GATEWAY'S OVERALL GROWTH RATE HAS NOT APPROACHED DELL'S THE MARKET HAS FAVORED GATEWAY WITH EVER HIGHER STOCK PRICES AND EQUAL PE!
"...and a slowdown in business sales as large enterprises cut back or froze spending because of Y2K worries."
Contrary to some popularized opinions, Gateway's total business sales model has been heavily skewed or dependent on single sales to large enterprise operations. One loss or cutback of one of those accounts and Gateway's ENTIRE BUSINESS sales picture is hindered. Dell's business sales model, on the other hand, is well evened out - many new large accounts but much more small account dependent (SOHO) to compensate for any single large account loss or cut back. Besides, the information states "cutback due to Y2K". This implies that since y2K has nonproblematic that those "cutbacks" will now be flooding the market! Dell's profit and sales picture will be, as stated before, heavily skewed or backend loaded toward this month. Those businesses that cutback with Gateway may likely come to Dell - very likely as Gateway continues to experience shortages, the only firm able to supply the market in this environment has been Dell (for many reasons).
"Supply of key processors and motherboards was severely constrained, spotty and unreliable, particularly in our consumer sweetspot in the $999 to $1,299 price range," said John Todd, Gateway's senior vice president and CFO."
Gateway did use AMD products! Don't you think that Intel snubbed their noses at Gateway when Gateway began plowing with another's hefer? Even though they may have quit, Intel was offended! The shortage issues are very likely AMD dependent.
"Y2K concerns popped up particularly with large corporations, government and educational institutions. Education sales fell 15 percent in the fourth quarter."
No kidding. Dell is just now moving heavily into the education market. It is highly likely that many of those lost sales were Dell dependent. But, again, Dell's sales are more evenly spread across the whole spectrum. Also, Gateway is EXTREMELY dependent on North American sales. Dell's business model is moving also toward Europe and Asia, both areas with new plants. South America also comes online this year with the Brazil plant.
"Sales to small and mid-sized business increased 35 percent."
WOW! This is Dell's strong math area! If Gateway's sales increased this much to small businesses, what do you think Dell's sales increased to?
Gateway also mentioned that their internet PC model was a smash hit. If their model was a hit, HOW WELL DO YOU THINK DELL PERFORMED IN THIS AREA?
BOTTOM LINE: THIS IS BULLISH BOYS AND GIRLS! Let's put our crying napkins back in our pockets and start buying! |
