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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: kemble s. matter who wrote (139903)	8/18/1999 9:44:00 PM
From: stockman_scott	Read Replies (1) \| Respond to of 176387

Kemble: Here is a Nice Review of What DELL has Accomplished... 'Dell delivers 2Q growth, predicts continued strength' <<By Larry Dignan, Inter@ctive Investor, PC Week August 18, 1999 10:04 AM ET The largest direct seller of PCs reported second quarter earnings of $507 million, or 19 cents a share, on sales of $6.14 billion. The results beat Wall Street's expectations for both earnings and sales. First Call consensus for Dell called for earnings of 17 cents a share. USB Piper Jaffray analyst Ashok Kumar was expecting revenue of about $5.8 billion. Dell's sales total may allay some fears. Many analysts on Wall Street were expecting sales growth of about 35 percent, impressive, but not Dell-like. Dell's revenue growth for the quarter was 42 percent. Dell saw "exceptionally strong" growth in the consumer and small-business markets. In the same quarter a year ago, Dell reported earnings of $346 million, or 12 cents a share, on sales of $4.3 billion. Sequentially, Dell's sales gained 10.9 percent. Company executives expect to at least maintain the company's traditional second half growth. A Dell survey of 900 customers indicated that Y2K-related caution among large corporate users would be offset by sales growth from government agencies, small business and consumers. "Our outlook for the rest of this year and all of next remains very healthy as Y2K concerns appear to be diminishing," Dell CFO Tom Meredith said, during an afternoon conference call with analysts. "We see no reason for our historical pattern to deviate." Second quarter gross margin was 22 percent, up from 21.5 percent in the first quarter, but down from 22.7 percent a year ago. The sequential improvement was helped by steeper-than-expected price declines for parts, Meredith said. "We think components are likely to decline at a healthy pace going forward, although they might not decline at the pace we saw in this quarter," Meredith said. Average selling prices for PCs fell to $2,200 from $2,300 previously -- a less steep price decline than competitors saw, Meredith said. Dell said its U.S. consumer shipments were up 100 percent in the quarter and half of those sales came through Dell's Web site. Dell's unit shipments jumped 55 percent in the quarter. "Part of the recovery is due to the migration of Compaq's customer base to Dell due to more aggressive price posturing," said Kumar in a recent report. "With an improving win rate at business accounts, we are forecasting a meaningful pickup in sequential growth rates in the second half." In the last month of the quarter, Dell said Internet sales were $30 million a day, nearly 40 percent of company revenue and an $11 billion annualized run rate. Dell generated $930 million in cash in the quarter and repurchased 17 million of its own shares. Dell ended the quarter with $4.7 billion in cash. Internationally, Dell raked in 70 percent of its sales from the Americas, 23 percent from Europe and 7 percent from Asia. Sales in the Americas jumped 48 percent from a year ago because the company made inroads to the home and small business markets. Revenue from home and small business customers jumped 67 percent. Sales to large and medium business customers grew at "a very healthy rate," the company said. In Europe, Dell's sales jumped 24 percent with strong shipments to the United Kingdom and France, where the company commands the number one and number three market shares, respectively, executives said. "I would be very surprised if we do not see accelerating European growth rates," CEO Michael Dell said during the conference call. In Asia-Pacific, Dell's revenue rose 52 percent. The company also made progress in the server and notebook computer markets. Enterprise sales, including network servers, workstations and storage products, jumped 85 percent from a year ago. Notebook sales jumped 49 percent, but were constrained by shortages in flat panel displays. As a percentage of revenue, desktops represented 60 percent of Dell's revenue. Enterprise systems represented 16 percent and notebooks came in at 24 percent. -- Sergio G. Non contributed to this report.>>