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

To: rudedog who wrote (153590)	2/11/2000 12:52:00 AM
From: Sr K	Read Replies (3) \| Respond to of 176387

The projections for revenue were 5% for Q1 with February looking flat so far; and moving toward 30% with acceleration in H2. Earnings projections were not projected at 30%, but with the 7 to 7.5% margins you can calculate what they mean. I still think just above or below 80 cents will be the new estimates, and that is about 20% over FY00. How people value this level of earnings, where about 1/4 is used to buy back shares offsetting employee and director stock options, is the guessing game and what will make the market. W2000 is not a consumer OS, so Niles' comment that this would help consumer sales -- Niles thinks it is significant that the pc will start getting more memory per box and consumers will want to make sure they have that for Windows 2000, so that's a benefit for DELL. -- is out of left field.

To: rudedog who wrote (153590)	2/11/2000 8:11:00 AM
From: GVTucker	Read Replies (1) \| Respond to of 176387

rudedog, RE: if they got only 3% earnings growth on 31% revenue growth, and are predicting flat earnings for 1Q, what kind of astronomical revenue growth are they predicting to achieve 40% earnings growth in the remaining 3 quarters (to achieve 30% for the year)?? It is the classic 'let's hope we can grow out of it' style of DELL management. Look at the new consensus for this year: 4Q 2000 actual: 16½ vs 15½ FY Jan 2001 1Q: 16½ vs 16½ 2Q: 20½ vs 19½ 3Q: 25½ vs 18½ 4Q: 27½ vs 16½ Where the company has visibility, net income growth is zero, consistent with the last two quarters. That means that in the last two quarters of this fiscal year, to make the new analyst estimate of 88½, DELL needs growth of 39% and 69% in the 3Q and 4Q respectively. The odds of the 3Q growth happening are low, given the trends of the last year. For DELL to make the 4Q number, they would have to significantly grow margins to numbers not seen for a year, in an environment where margins aren't improving. In fact, Meredith's guidance of net margins in the mid to low 7's is consistent with a permanent shift to lower margins. The absurdity of current analyst estimates is evident in looking at their margin numbers. Steve Fortuna's model shows operating margins going from this past quarter's 7.5% to 8.7% next quarter and going all the way up to 10.2% in 4Q, a low probability event IMO. Buying DELL here is an enormous bet on the second half of the year, as you correctly presume. And neither DELL management nor the Wall St analysts have any idea on what is going to happen that far out, in spite of their guidance.

To: rudedog who wrote (153590)	2/11/2000 8:20:00 AM
From: Meathead	Read Replies (2) \| Respond to of 176387

Hi Rude. TM stated in the warning that Q1 was going to be flat as a pancake. Not many seem to remember that but I do vividly. Furthermore, if revenue grows by 5% and earnings don't (which is their guidance), it means gross margins are going down further from here. MEATHEAD