Dr B,
If you're interested, I still have Wall$treetWeek on tape and can transfer Birinyi's comments to Purevoice which can be Emailed to you. (along with the URL to get the free Purevoice player / recorder)
Following is Bloomberg's coverage of an interview this week with a VP in Dell saying all is going very well this quarter. Prices are holding up well, and Dell continues to take market share. To me this implies a better than expected quarter for the whole sector.
Essentially, it seems that the Street has been able to play the same "fear" game repeatedly in the PC sector. After all, why quit when the manipulation is so easy and so profitable?
Enjoy the story,
Ian.
Dell Vice Chairman Rollins Says PC Market 'Healthy'
San Diego, March 23 (Bloomberg) -- Dell Computer Corp. Vice Chairman Kevin Rollins said the personal computer market is ''healthy'' and there's nothing ''abnormal'' in the quarter to alarm investors about business at the No. 1 PC direct seller.
''We don't see anything right now to suggest that we are off the trajectory,'' Rollins said in an interview. ''Our business is very healthy.''
Dell fell 2 3/16, or 5.8 percent, to 35 11/16. The shares have dropped 20 percent in the past five days as concern mounted that the company may be shipping fewer PCs than expected in the fiscal first quarter while the average price is lower.
Rollins declined to give specific forecasts for the quarter that ends April 30, though he said competitors aren't cutting prices aggressively to gain sales at corporations and Dell is winning many of those sales. At the same time, he reiterated that Dell isn't interested in selling bargain-priced machines that cost well below $1,000.
''We're still not trying to attract first-time users,'' Rollins said.
Dell started selling a $999 model, though Rollins doesn't consider that the low end of the market anymore. Some machines from competitors cost about $600 and one manufacturer, Microworkz Computer Corp., is offering a $299 version.
Slowdown
Dell's shares have been buffeted since February, when it reported a slowdown in sales growth to 38 percent in the fourth quarter. Its shares fell 8.1 percent on Feb. 17.
Today, Rollins said Dell should have been more aggressive in cutting prices to win sales at the end of the last fiscal year. As a result, the company's earnings increased more than planned and sales faltered.
''We didn't move fast enough,'' Rollins said.
Rollins said there is nothing about the computer market that will keep Dell from growing as fast as it has historically, though there may be physical limitations for such an enormous company. Being able to hire enough people and build enough buildings are two potential restrictions.
''Sometimes, physics takes over,'' Rollins said. ''At some point, it will.''
For the last three years, Dell has been the best-performing stock on the Standard & Poor's 500 Index, increasing in value about 35 times from a split-adjusted 1 5/64 at the end of 1995.
Yesterday, Donaldson Lufkin & Jenrette Securities Corp. analyst Kevin McCarthy cut his profit forecast for the first quarter to 15 cents a share from 17 cents.
McCarthy expects sales to rise 36 percent to $5.35 billion.
McCarthy expects Dell to earn 72 cents for the year on sales of $25.1 billion. That's down from estimates of 75 cents on sales of $25.6 billion. Analysts polled by First Call Corp. expect earnings of 16 cents for the first quarter and 73 cents for the year.
16:56:33 03/23/1999 |
