Frank EM - my plans for Dell in more detail ... and why
MD and freudian slips re:earnings
Md - in his CNBC interview last week stated something like the following - I am paraphrasing here.
Their business is booming
Unit growth is strong
ASP is declining, so it is difficult to keep the growth in revenue in line with growth in units.
But their costs are also declining, so the profit on each sale is holding up.
His remarks were extemporaneous and it wasn't clear whether he meant "profit margin" or just profit, but he must mean profit margin.
He didn't know whether the pundits would be "overjoyed" with bottom line or just pleased.
I've heard no "clarifications" since the interview.
What those remarks portend
My interpretation of those remarks is that their results should show strong unit growth (in line with IDC, and perhaps then some due to timing differences), a decline in ASP roughly equivalent to the industry's, a somewhat stronger gross margin than last quarter, and a blowout bottom line.
We'll see. I don't want to get anyone's hopes up, but that is what I have come to expect of the quarter.
What I'll do if they disappoint
I have great confidence in this company and its management's integrity, and MD's competitive spirit just won't quit. He wants to blow the pundits out of the water, but is too much of a gentleman to say so. Good for him.
If I'm disappointed, then I'll lick my gaping wounds, sell out and crawl onto something else - I'm impatient by nature and tired of waiting for good results.
If earnings are good, the stock still might go nowhere, but I'll stick around anyway
The only possible fly in the ointment is.....AG......what will their minutes reveal on Wednesday? I've got a feeling.....he will want to look like the big, bad inflation fighter and start whimpering about inflation. And that could take the wind right out of Dell's sails once again! It seems there is no end to it, but that fits right into Dell's pattern lately...a damnable lot of bad timing. That will change.
But so long as Dell's report card is good, I'll stay the course. They will have retained my confidence and respect. I like investing in stuff like that. |
