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Technology Stocks : Dell Technologies Inc.
DELL 133.180.0%12:59 PM EST
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To: Chuzzlewit who wrote (80443)11/15/1998 4:34:00 PM
From: larry  Read Replies (4) of 176387
 
Chuzz,

Thanks for your explanation on DSO data.

But how about this?

"Is this Dell's Last Hurrah or just a pause?

Dell's last earnings report showed signs of strain. The million dollar question: is this a prelude to DELL missing their earnings numbers (as they did in late 1995) or is this just a slower period soon to be followed by a stronger period.

Most CFO's and CEO's use good times to build up reserves on their balance sheet and in their business practices so that they can get through rough spots without having to miss earnings numbers. If you look carefully at an earnings report you can sometimes discern that a company is using up reserves to make numbers. This often but not always procedes an outright miss of earnings numbers.

So what are the signs of strain in the DELL earnings report? There are quite a few.

Rather than put them all in one long message I'll try to spread it over several messages.

But first a quick summary of the signs of strain:

Revenues were lower than many if not most analyst estimates.

Earnings barely beat estimates (if you use an extra decimal point they were 27.8 cents vs a 27 cent estimate).

Days Sales outstanding rose.

Operating expenses as a per cent of revenues decreased (signalling that they held back on hiring and on other discretionary items to help them make the quarter).

Gross margins declined and on the conference call they signaled that further declines are likely next year.

Lastly, the balance sheet gave an indication that a large number of employees exercised options during the quarter.

Why excluding Kumar from the recent conference call? MSFT, CSCO, GE...the top companies NEVER exclude an analyst out of the conference call. Chris Stix is widely regarded as the one that triggered the down fall in CSCO weeks ago, yet he was active in the recent CSCO conference call. It might be that MD's ego has run to such degree that he won't tolerate any negative comments on his company. Or is there a familiar pattern following here? OXHP, CD, BOST......hundreds of companies did the same thing in the past and resulted a strikingly familiar results. I will let it stop here.

None of this is definitive, it may just be a passing storm (some will argue that it is not even a storm) but it is something to be aware of. "

You can take these as rumors spread by short sellers. However, I believe that most of what was listed here was true with the exception of possible explanations. I do want to have some nice answers to those questions.

I believe that the SI DELL thread has lots of good investors with great visibility over the future. And your answers will be greatly appreciated.

larry!
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