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To: rupert1 who wrote (71779)	11/12/1999 7:19:00 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

victor..... I realize that my 28 by 12/31 is a stretch, but I'll stick with it. Then 32-33 by 1/31. El

To: rupert1 who wrote (71779)	11/12/1999 10:31:00 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

victor... found this at the Zoo Dell site, thought you might find it interesting. El .......... The dirt on Dell by: NASDAQNYSE (34/M/NY,NY) 11/12/1999 10:15 pm EST Msg: 287772 of 287781 The dirt on Dell... Everyone knows Dell's numbers were reported last night. The newspapers all tried to talk about how great it was, as did some of the Wall Street dead fish. What follows is a breakdown that gives you the real dirt. This is the kind of thing that analysts used to do, but which you don't see done very much any more. So for those of you who care, here it is: Dell earned 17.7 cents, ergo 18, but the $10 million increase in other income over last quarter was .4 cents (not all of this was necessarily pure profit, but the $6 million sale from Red Hat was), therefore 17.7 was 17.3 = 17 cents from a headline standpoint. Now revenues were up 10.5 percent sequentially while receivables were up 16.6 percent, i.e. one grew $642 million while the other grew $403 million. Almost the whole two-thirds of the increase in revenues went into receivables. Depending on how you assess this, you're talking approximately another 1 cent. So now we are at 16.3 cents versus a prior estimate of 21 cents, 19 cents last quarter and 14 cents last year. The company admitted its backlog was about the same (i.e. lower), going into its strongest quarter. What does that tell you about the stretch to make this quarter, a few pull-ins? They also guided lower for revenue growth next quarter from the 15-percent historical number and the 10-11 percent prior guidance to 7-8 percent (I bet that is optimistic), and the permanently guided-down net margins from 8-plus-ish percent to 7.6-plus-ish percent. Even though it is expected to bounce up from this quarter's "DRAM problem." In summation, the number was a big miss. The company guided lower for revenue growth and net margins; therefore all numbers prospectively will have to be cut. Why pay 60 times earnings for 20 percent year-over-year operating income growth, with sequential growth slowing? This may be a little too detailed for some readers, but this is the type of look behind the numbers that Wall Street used to do before the analysts abdicated their responsibility. Please be sure you've read "What is the Market Rap?" before you send me e-mail. As highlighted in this outline, there are certain questions to which I am unable to respond. William A. Fleckenstein, special to Silicon Investor.