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Mohan, I too have been trying to poke holes in Dell's eps and could
not do it. They knocked the ball out of the park. What amazed me is
that they gained so much revenue in Europe after the European countries
admitted that growth was not happening for pc sales. I think there
are 3 reasons for Dell's success: 1. As the smartest direct seller,
they were able to pass on lower component prices on everything from
Drams to Modems without cannibalizing their current inventory. 2. They
announced a hot new Pro pc for homes as well as businesses. 3. They
are one of only 2 companies in the US to have SDRAM in their boxes.
Of course, I expected them to make their number this quarter, but they
blew past it. However, I think they just took market share from nearly
everyone else. And those everyone else's have just one response: lower
prices and tighten inventories. And, the Japanese have not yet made
their landfall, so the big game is yet to be played. But now I wish
I had waited to buy my first third of
Dell puts. AMAT was the best looking "disaster" I've ever seen. Sales
jumped 57 percent, on a 9 month basis,
showing that capacity is still being built. However,
orders are falling and that means margins are goners. So, from the
point of view of AMAT, it was the last great quarter for this cycle,
and they have been around long enough and are honest enough to admit
it. As far as the semis go, that was a heck of a lot of equipment
sold that still hasn't all been put in place and almost none of which
is producing chips at the max rate. MB |
