Andreas,
I calculate Q1 99 Cost of goods sold as 75% of revenues (7092/9419) and Q1 98 Cost of goods sold as 82% of revenues (4664/5687). So, we're looking at a decrease in cost og goods sold, not an increase. But SGA is clearly much larger in Q1 99. As others have suggested the major dif between the two years Q1 is the presence of DEC staff. Apparently there is a need to trim the staff expense part of AGA OR increase the revenues by slicking up their operations. The other factors comprising the short fall in revenues we're unable to see in the financial report are exactly which comps were sold more cheaply than expected, which servers and work stations did not sell as anticipated, etc., etc. IF they had made the 10 bil number than clearly earnings would have been .33 higher (10 bil-9.419bil/1.74bil shares). Even dropping to 9.75 bil would have produced another .19/share. All in all I think it was the revenue short fall problem, which is the failure to execute the model, which has poroblems because of the ODM and the lack of stratification of product and service to method of sale (channel, direct, dealers, service personnel, etc.)
If any of this makes any sense in hypothetical form then we "should" see in the future:
1. more clarification of "who" gets to sell what with minimal competitve overlap
2. more comprehensive service/design initiatives and performance
3. more/better product/market differentiation
Doug |
