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Technology Stocks : Dell Technologies Inc.

DELL 146.68

-1.7%

Nov 7 9:30 AM EST

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To: jim kelley who wrote (92016)	1/28/1999 12:17:00 AM
From: Chuzzlewit	Read Replies (1) of 176387

Re: Compaq earnings Jim, I couldn't help it. I took a wee peek at the earnings, and the smell wafted over me like old, unwashed socks! Here's what I found: Last year in this quarter the company had a gross margin on products of 27.5%. This year that margin was down to 21.9%!!!! What makes this doubly remarkable is that the company took a $3BB "in-process R&D" write-down. Now that's the kind of accounting trick that they use to hide future expenses. So, I believe that earnings may be significantly worse if properly accounted for (according to the way I account for these things). A look at cash and A/R tells me that something's rotten in the City of Houston. This is a pretty ugly looking statement in view of the fact that they are supposed to be doing more direct sales, which ought to be increasing their gross margins. Big question: how do they account for factored A/Rs? TTFN, CTC

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