Jim, you're right, I did notice the discrepency in the IDC report. I had a look at the Gateway report but couldn't pull anything out of it that could help me with DELL. In DELL's Q3 report their ASP dropped $75 per unit but their margins moved up 1/2 of 1%. Q3 was the quarter Compaq launched their sub $1000 PC and DELL was probably very aggressive in trying to minimize market share loss to the retail sector. Ergo, the drop in ASP, although this was somewhat mitigated by their growing presence in the server market.
Q4 could be a replay of Q3 in terms of ASP & margins [i.e., $2625 and 22.5%]. However, I believe that ASP may have eroded an additional $50 - $75 per unit whereas gross profit margins have moved up at least another 1/2 of 1% - maybe as much as 1 full percentage point.
In my eps estimates I've used 1400k units, $2575 ASP, 23% G.P., 11.6% operating expenses,and fully diluted average weighted shares of 358m. This generates approximately 83› eps. However, I don't have to be far off on GP and ASP to move this eps to 90›.
All I can believe, at this juncture anyway, is that the lowest eps is probably in the 81› to 83› range. And this, without this Q's worry of whisper numbers, will probably viewed as being very positive.
Add in some additional factors such as a stock split, a typically positive cc and a higher eps and we could be looking at significant upward stock price movement after the report.
BTW, with regards to the possible split: DELL investor relations stated a while back that the reason no split was announced in November was due to the notion that this might seem "gimmicky" - i.e., too many, too soon. A 5:2 or 3:1 split would remedy this and probably limit DELL to one split per year. |
