Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 159.33

-1.8%

Nov 7 9:30 AM EST

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To: Kirk © who wrote (10652)	8/18/2002 1:47:34 PM
From: Lizzie Tudor	Read Replies (1) of 10921

Still, the % of revenue they spend on R&D, I'd put them more in the league with a food company. Yeah- I know. To be honest I have a hard time coming up with an industry to lump Dell into. You are correct about their R&D- but that is the bells and whistles they put into the hardware they sell. The real R&D at Dell is capex against their supply chain. But then its lumped into every other kind of capex so try to assign a value to that. I must say though, I'm amazed that after all this time people think Dell is just a distributor. We had these discussions in 1997 when Dell first hit 20 billion mkt cap. That was when the reality hit for some that there was a different business here, than say Packard Bell or Cpq. At first the cash flow numbers coming out of Dell were large but not enormous, that was the key to seeing the difference in the model. Dell generated about 900mm in cash last quarter, about average for them. In contrast BBY or other retailers may have similar earnings to Dell .19/share, but about 1/3 the cash flow. (BBY had a onetime event a quarter ago which helped their cash). And even within the cash flow numbers, most retailers like bby generate a lot of it through their financing programs. Dell hasn't started one of those yet to any degree, if they did, they could generate substantially more. Just trying to point some of this out- I believe the semi's rallied on the Dell results which were excellent imo. Any Semi bulls should listen to the Dell call- they tell it like it is and the news was certainly not all good. But progress is being made and revenues are up over last year (single digit teens just like cisco) and most was enterprise and laptop (specialty) business. Lizzie

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