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

To: Sig who wrote (172782)	5/15/2003 1:45:30 PM
From: William F. Wager, Jr.	Read Replies (2) \| Respond to of 176387

Briefing.com... 11:27 ET Earnings Preview - Dell Computer (DELL): 32.50 +0.25: Ever shown up to a party just as it's winding down? Well, Dell's earnings report, due after today's close, is likely to be the equivalent of last call at the bar. Anticipating a strong report, investors have bid DELL up by 14% in just the last two weeks. The stock, which established a new 52-wk high again this morning, is up 22% year-to-date. The market's enthusiasm for DELL is not without merit. During extremely difficult industry conditions, the company's low-cost model has enabled it to keep prices down and steal share from its competitors. Company is also making significant headway in the enterprise and printer markets -- areas of considerable growth for the PC giant. Just how good will the numbers be? If the company meets the consensus estimates for sales and earnings of $9.5 bln and $0.23, we're looking at year-over-year gains of 18% and 35%, respectively. In today's tech environment, those numbers are huge. Briefiing.com also notes that it would also represent DELL's biggest percentage revenue gain in more than two years. Strong notebook and enterprise growth are seen to be behind the big jump in revenues. However, in light of the stock's recent advance it will gain little from the headline numbers. Guidance will be the key, and that could be sobering. Street looking for EPS of $0.24 on sales of $9.76 bln. Also expecting company to note that while it continues to win share in all markets, it remains vulnerable to the sluggish economy and the lackluster IT spending environment. SARS might even get a mention as a potential hurdle. The biggest obstacle to future growth, especially in Q2, is DELL's relatively large exposure (15%-20% of US sales) to the government/education market. Anybody paying attention to their local political scene knows that states across the country are suffering from severe budgetary shortfalls. The budget crises could threaten DELL's ability to hit the Q2 revenue consensus. With the stock currently trading at 32.6x FY04 estimated earnings of $1.00, there's no room for disappointment of any kind. By comparison, the tech sector as a whole trades at roughly 21x FY04 earnings. Quite simply, DELL is priced for perfection. Consequently, even if the company delivers strong Q1 earnings and manages to reaffirm its Q2 and FY04 targets, Briefing.com contends there's little upside left in the stock. If you are thinking about buying DELL on the heels of a good Q1 report, think again. Investors have already celebrated this report -- the party's all but over. And should guidance for Q2 disappoint in any way, the hangover is apt to be nasty. -- Robert Walberg, Briefing.com