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Technology Stocks : Dell Technologies Inc.
DELL 138.940.0%Dec 5 9:30 AM EST
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To: Gabriel008 who wrote (121955)5/4/1999 12:10:00 AM
From: jim kelley  Read Replies (4) of 176387
 
Gabriel,

RE: DELL's earnings and revenue for Q1-00
*****************************************************
Using the following assumptions:

ASP = 96% of Q4
OPEX = 9%
R&D =74M
COGS= 22.4%

I get the following results:

Sales 5.9

Units 2.6 M with 182 K units pushed to Q2

Earnings = 511 M

EPS= 18.7 cents per share

Revenue growth rate YOY = 51%

EPS growth rate YOY = 72 %

Stock price target = $ 56 to $60 per share

Alternative Analysis:

It is clear that if DELL chose to , it may have taken the extra 182 k units in Q1 rather than pushing them to Q2. If Q2 is looking strong and there is sufficient production capacity there would be no reason to push them to Q2-00.

In that case the results are as follows:

Revenue = 6276
EPS = 20 cents per share

Revenue Growth YOY= 60%
EPS growth YOY = 84%

Target Price = $67 to $ 72 dollars per share

Summary:

Just my SWAG on the earnings report. The earnings I calculate are higher than what you have due to the cost control effort on both R&D and OPEX. I am assuming that the component cost reductions are being passed through and that the IBM royalty abatement is also being passed through. I am using the same 585 K unit number for January. No revenue or earnings allowance is being made here for Gigabuys or External Storage systems.

Regards,

Jim Kelley
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