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

To: BBG who wrote (156749)	5/4/2000 11:26:00 AM
From: Rob C.	Read Replies (1) \| Respond to of 176387

Guys, With y2k out of the way wouldn't Q1 be very strong for Dell? Regards, Rob

To: BBG who wrote (156749)	5/4/2000 1:13:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

BBG - I don't necessarily agree with Fleck either - but I do agree (as do other longtime DELL investors) that the next few quarters place a very steep hill for DELL to climb if they are to achieve the 30% growth they have forecast. they need a strong 2nd quarter to be credible with that claim.

To: BBG who wrote (156749)	5/4/2000 3:01:00 PM
From: D.J.Smyth	Read Replies (3) \| Respond to of 176387

let's disect fleck: What concerns Fleckenstein...is Dell guidance regarding the second quarter. "There's absolutely no way they can get to the following quarter's estimate of 21 cents," he says. "Doing so would require them to be up 10% year-over-year in terms of earnings." Dell made $.19 in earnings on $6.1 billion in revenue, or a profit of $501 million. The second quarter, with projected revenue over $7.2 billion can't perform at $.21? Their profit margin would drop below 7% if they could not make $.21. The main reason Dell's profit margin fell from 8% to 7.2% in the first place was due principally to increased operating expenses primarily a result of additional hires (parts costs were already factored into analysts equation). The additional hires were needed for increased demand in servers and sales of PCs to the consumer (outside the context of the business platform). Dell added 36K new workers. These workers have been intigrated and Dell's expectations relative to revenue per employee are being met. He cites the same thing he's been citing for months: Corporate PC demand has fallen off a cliff. now what does this mean? Corporate PC sales are still trending worldwide at between 15% to 18%. How can one interpret this as "falling off a cliff"? Does he mean euorpe is "off the cliff" at 11% growth as opposed to the projected 15% that was there? Europe comprises 22% of Dell's total revenue picture. Thus Dell only needs an uptick of 1% in the America's or an uptick of 3% in Asia to compensate for missing Euro sales - or a combination of the two (all other factors being equal). but operationally, there's no way they'll make 21 cents." this is only true if Dell's expansion continues due to increased demand - your intial expansion costs generally outstrip your gains until the expansion is firmly in place to meet expected, increasing demand