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

To: JRI who wrote (151795)	1/23/2000 5:46:00 PM
From: Meathead	Read Replies (1) \| Respond to of 176387

Re: I would be surprised if they are so far off (3% vs. your hoped 8%+)... I'm not disputing the accuracy of IDC's numbers. For Dell to make the 8%+, all they have to do is ship 150k more units in Jan than they did in Oct which is not that difficult unless this month is unusually weak. Mathematically, one should expect 100-150k more units based on historical patterns so 3.5M units is not a leap of faith. Your assessment of Jan makes plenty of sense but I believe the business has become much too complicated to feel reasonably confident in such rationale. However, the company has said nothing so speculation is all we have. At 3% unit growth, it would be quite difficult for Dell to come anywhere near making the Q (in terms of EPS)... they'd miss by .02 unless other metrics improved dramatically over Q3. The Q would be ultraflat and we really should have had a warning by now. However, other important variables such as ASP, GM, and OPEX are only a conservative extrapolation from the previous Q and can go either way. These other variables aren't trivial either. Dell could actually ship +3% in volume but if ASP and OPEX are held flat from Q3 and margins get back to the low end of historical norm at 21.5%, Dell can beat the street by a penny. IDC data is one of the only clues we get from an independent source to gauge how the quarter is going. This data confirms that I need to use very pessimistic volume numbers in my spreadsheet (slightly under 3.5M). My guess is that it will be a weak quarter as well. In short, too difficult for anyone except Dell to call at any time during the quarter. However, I would be surprised if the IDC numbers did not cause the stock to trade lower next week. MEATHEAD