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

To: rudedog who wrote (145854)	10/27/1999 12:36:00 AM
From: Alohal	Read Replies (2) \| Respond to of 176387

Aloha Rudedog! I couldn't agree more that Dell looks to be the big winner. The question is how big. I am increasingly feeling like Dell actually has set up the 3Q reporting period to surprise very big to the upside. If BBS revenue estimates (per Tiger Paws post # 145856) of 6.8B are correct, then @ 10% margin EPS would be about .27! Even @ 9% EPS = .245 and if margins were truly squeezed by the DRAM problem down to 8%, EPS would still be .217! Even using the more conservative 6.75B the numbers are: 10% = .27 9% = .243 8% = .216 These figures all based on 2.5B outstanding shares. These numbers sound spectacularly good to me. Am I missing something here? Cheers Alohal

To: rudedog who wrote (145854)	10/27/1999 5:51:00 AM
From: Mick Mørmøny	Read Replies (1) \| Respond to of 176387

You got your story right this time. And Com "Stuff Ze Channel" paq won't be number one next quarter. $$$ Compaq Reports Earnings of $140 Million in Quarter $868 Million Charge to Cover Cutbacks By SAUL HANSELL Compaq Computer reported Tuesday that it earned $140 million in the third quarter, beating Wall Street's expectations despite sluggish sales. The company, which has been plagued by bloated costs and management turmoil, took a charge of $868 million to cover severance pay and other cutbacks, which was offset by a gain of $1.2 billion on the sale of most of Altavista, the Internet search engine. Excluding those one-time events, Compaq earned 7 cents a share. Analysts had expected 5 cents. It posted sales of $9.2 billion, up 5 percent from a year earlier. But revenue was down by 2 percent from the second quarter and below analysts' expectations. The quarter was the first under the command of Michael Capellas, who became chief executive in July. In April, Capellas's predecessor, Eckhard Pfeiffer, was forced out as chief executive after the company warned that earnings would fall short of expectations. Compaq's shares closed at $19.50, up 56.25 cents. They had hit a 52-week low of $18.25 last Friday. In a conference call, Capellas said his top priorities were to stabilize the company's business, cut costs and simplify its product line. "We may sacrifice market share in order to return to profitable growth," Capellas said. The company plans to cut $2 billion in annual expenses, largely by eliminating 7,000 jobs, he said. Analysts said that Capellas's plan sounded sensible but that it was too soon to say whether it would return Compaq to vibrant growth. "They are making progress," said Andrew J. Neff, an analyst with Bear Stearns. "But you have one dot on a graph. It's too soon to draw a line." Compaq's turmoil comes as its Texas rival, Dell Computer, continues to post solid gains in sales, profits and market share. Indeed, in the third quarter, Dell edged past Compaq for the first time to become the No. 1 seller of personal computers in the United States. Compaq remained the worldwide leader. "Compaq is in a tough position," said Neff. "The market they are in is getting much more competitive even as they are taking steps to downsize their business." Compaq, for the first time, broke down its sales and earnings according to its three major product lines: consumer PC's, commercial PC's, and bigger computers and services. This disclosure showed that Compaq's commercial PC unit is the most troubled. Its sales dropped 12 percent from a year ago, to $2.7 billion, and it lost $169 million, in contrast to a profit of $116 million a year earlier. The company said the loss stemmed from competitive pricing, a reduction in the inventory of its dealers, and the impact of the Taiwan earthquake. "We know we have to address our commercial PC business," Capellas said. For consumer PC's, Compaq's sales increased 15 percent to $1.5 billion, despite a sharp decline in the average price of a computer. It earned 65 million in that category, up 51 percent from a year earlier. And in its enterprise unit, which incorporates its acquisitions of Digital Equipment and Tandem Computers along with its other server computers, revenue grew 12 percent, to $4.9 billion. It earned $599 million, up 87 percent from a year ago. "They are not knocking my socks off in high-end systems," said Richard Schutte, an analyst with Goldman Sachs. "This is an area where Dell is growing at 85 percent a year." Capellas said the company had not seen any slowdown yet related to Year 2000 problems. The International Business Machines Corporation said last week that it expected a sharp drop in sales of mainframe computers over the next six months as big companies hold off installing new systems until they are sure they can handle dates in the new millennium. But Capellas said he expected some slowdown in the last two months of this year.