I have no position in Dell. I am sitting on an unrealized loss of 50%
in RDRT and thinking about jumping over to Dell on this weakness, but
may not do it. But I hate unsupported facts like this financial
engineering thing. Here is some cut-outs from Dell's last Form 10-K,
the annual report to the SEC:
sec.gov
Financing and Other (Page 15, MD&A section)
Financing and other increased $19 million in fiscal 1998 from fiscal 1997 to $52
million primarily as a result of increased investment income due to increased
average marketable securities balances. Also, financing and other increased $27
million in fiscal 1997 from fiscal 1996 to $33 million due to increased
investment income and decreased interest expense.
DELL COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-----------------------------------------
FEBRUARY 1, FEBRUARY 2, JANUARY 28,
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Net revenue............................................. $12,327 $7,759 $5,296
Cost of revenue......................................... 9,605 6,093 4,229
------- ------ ------
Gross margin.......................................... 2,722 1,666 1,067
------- ------ ------
Operating expenses:
Selling, general and administrative................... 1,202 826 595
Research, development and engineering................. 204 126 95
------- ------ ------
Total operating expenses...................... 1,406 952 690
------- ------ ------
Operating income.............................. 1,316 714 377
Financing and other..................................... 52 33 6
------- ------ ------
Income before income taxes and extraordinary loss..... 1,368 747 383
Provision for income taxes.............................. 424 216 111
------- ------ ------
Income before extraordinary loss...................... 944 531 272
Extraordinary loss, net of taxes........................ -- (13) --
------- ------ ------
Net income............................................ 944 518 272
Preferred stock dividends............................... -- -- (12)
------- ------ ------
Net income available to common stockholders............. $ 944 $ 518 $ 260
======= ====== ======
Basic earnings per common share (in whole dollars):
Income before extraordinary loss...................... $ 1.44 $ 0.75 $ 0.36
Extraordinary loss, net of taxes...................... -- (.02) --
------- ------ ------
Earnings per common share............................. $ 1.44 $ 0.73 $ 0.36
======= ====== ======
Diluted earnings per common share (in whole dollars):
Income before extraordinary loss...................... $ 1.28 $ 0.68 $ 0.33
Extraordinary loss, net of taxes...................... -- (.02) --
------- ------ ------
Earnings per common share............................. $ 1.28 $ 0.66 $ 0.33
======= ====== ======
Weighted average shares outstanding:
Basic................................................. 658 710 716
Diluted............................................... 738 782 790
Some Financing and other activity, but not the level indicated.
Later, Dennis
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