Mike, did you get a chance to examine Dell earnings? They beat the estimates by a wide margin (1.15 before charge vs 0.86 expected) They too are saying all is well and good. While reading their press release, I carefully scanned for cracks in the wall. I could not find any. In fact their European sales are up nicely! Unlike Compaq which might have stuffed a lot of their systems in the retailers' inventory, Dell sells directly to the end-users. Since Dell, Gateway and Compaq are known for their clever inventory management for the components, is it possible that they can sustain a temporary pull-back in demand? Also, I think they are growing at the expense of no-name brands and IBM, Dec, AST, Acer and Hewlett Paccard.
Sure, we can not ignore the fact that the prices have been dropping so quickly in the last 2 months. That should hurt the margins for all of them. But, I hate to see things from only one side. Judging from what Dell just told us, may be we haven't seen the top for the box-makers yet. What do you think?
Also, please give us your opinion on the Applied Materials earnings report. Hopefully we will get some help on MU puts from their prophesy on semiconductor business in general.
BTW, Compaq is up 3/4 in after hours trading.
>>Mohan |
