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Technology Stocks : Dell Technologies Inc.

DELL 122.55

+4.4%

Nov 21 3:59 PM EST

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To: rvgent who wrote (115990)	4/10/1999 1:44:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

rvgent, your comment is backwards: if they were operating on thin margins a small decrease in sales would cause a small decrease in earnings. Dell operates on smaller gross margins than CPQ, yet managed to turn a nice profit last quarter with a revenue shortfall of greater magnitude (percentage wise) than CPQ's. But I think that kind of argument is irrelevant to the situation. I think the issue here is not so much gross margins as horrendous channel problems. Obsolete inventory can kill earnings in a hurry, and I think that's what happened. TTFN, CTC

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