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Technology Stocks : Dell Technologies Inc.

DELL 119.89

-2.3%

3:46 PM EST

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To: Chuzzlewit who wrote (116703)	4/12/1999 2:48:00 PM
From: jim kelley	Read Replies (1) of 176387

CTC, The CPQ channel inventory buildup was selective. CPQ showed a very high buildup in server inventory in Q4. It was almost 3 times the HWP level and more than IBM which also had a large buildup. Overall, they were up 38% compared to HWP 13% and DELL's 10 %. It is unlikely that the market was up more than 13% in terms of "sell through" to the end user. That means the channel was sitting on a lot of high priced inventory. It also means that the unit inventory levels could be lower while the revenue based inventory was higher than the 5 weeks that we calculated. This is the high margin product that "got sold" in Q4 and helped drive up CPQ's earnings and margin. Unfortunately, it looks like there was not the sell through that CPQ would have hoped for. Yep! Rolling revenue is a much better measure than anyone quarter for CPQ. JK

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