To: jim kelley who wrote (151943 ) 1/25/2000 2:07:00 PM From: JRI Read Replies (2) | Respond to
Jim, Dell's management made one clear mistake this quarter....they allowed the bar to get set too high....As you know, the game is to meet or beat estimates...holders of stock do not like to be (unpleasantly) surprised...Although, logically, it should not matter....it appears that it is better to beat a lower estimate, then to struggle and/or not make a higher estimate....Dell's management, given uncertainties about component pricing, Y2K (pre/post), and potential soft demand before Windows 2000 launch...should have guided analysts to a "makeable" target this quarter......especially given what happened last October.........I am wondering why Dell allowed analysts to model revenue growth at 40%+ revenue growth this quarter....their targets should have been guided towards close to 35%...so even if Dell came in around 7.1B (Niles new target)...Dell STILL would have exceeded the estimate(s)...also, consensus estimates should have been .20 this quarter...not .21....I believe it is Dell management's policy not to give specific (earnings) guidance, perhaps they should rethink this relative to what is happening this quarter....
