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

To: Sig who wrote (175544)	5/16/2006 4:02:04 PM
From: John Koligman	Respond to of 176387

Hey Sig, good to see a 'post' from you! I posted to you on this thread some time ago and was beginning to wonder what happened to you as I saw neither hide nor hare of you for some months on SI... I sent a PM to Kemble asking if he was still a true believer but have not heard back <ggg>.... Regards, John PS - Who wouldda thought, perhaps we can start trading that 22-28 range again pretty soon <ggg>...

To: Sig who wrote (175544)	5/16/2006 6:41:28 PM
From: stockman_scott	Respond to of 176387

HP has higher profit, helped by PCs and printers _________________________________________________________ Tuesday May 16, 6:17 pm ET By Duncan Martell SAN FRANCISCO (Reuters) - Hewlett-Packard Co. (NYSE:HPQ - News) on Tuesday posted a better-than-expected profit as it gained market share in personal computers and sold more of its highly profitable ink supplies, sending shares 3.3 percent higher. The No. 2 PC maker shed 1,600 jobs during the quarter under a cost-cutting plan by Chief Executive Mark Hurd, who started his job just over a year ago. Since then HP has gained PC market share while No. 1 PC maker Dell Inc. (NasdaqNM:DELL - News) has stumbled, and its ability to compete with International Business Machines Corp. (NYSE:IBM - News) has improved. HP, also the No. 1 printer maker, said net income for its second fiscal quarter, ended April 30, rose 51 percent to $1.46 billion, or 51 cents per share, from $966 million, or 33 cents per share, a year earlier. Revenue rose 4.6 percent to $22.6 billion. Excluding 3 cents per share in amortization costs, HP said it had a profit of 54 cents per share, beating the average analyst estimate of 49 cents per share, according to Reuters Estimates. Revenue matched expectations. HP boosted operating profit margins in its personal computer business and in its enterprise storage and servers unit. "The server business did better than expected and printing looked a little better, too," said American Technology Research analyst Shaw Wu. The company also issued a forecast for the current quarter that was ahead of Wall Street expectations. Historically, the July quarter is often a problematic one for the company. "Mark Hurd is really focused on execution and accountability," said Cindy Shaw, an analyst at Moors & Cabot Capital Markets. HP said last July that it would slash 14,500 jobs, or about 10 percent of its workforce, Hurd's biggest move to date to reduce costs at HP. With the 1,600 jobs eliminated in the just-completed quarter, total job cuts stand at about 8,100. HP has gained share in recent quarters in the rough-and-tumble PC industry. Analysts say HP and other rivals of No. 1 PC maker Dell Inc. are paying less for components than they had been, letting them lower prices and gain market share at Dell's expense. "HP is definitely doing better in PCs than Dell," Wu said. For the current, third quarter, HP said it expects earnings per share before items of 45 cents to 48 cents on revenue of about $21.8 billion. The per-share forecast includes 3 cents in stock-based compensation expense. Analysts currently expect a profit of 43 cents per share, including stock-based compensation expense, on revenue of $21.7 billion. "This was another solid quarter in the long-term plan and while we clearly have more work to do, we are building a stronger, more competitive HP," Hurd said on a conference call with analysts to discuss the results. Revenue in its PC business rose 10 percent to $7.0 billion as unit shipments rose 16 percent from a year ago. Operating profit was $248 million, or 3.6 percent of revenue, up from a profit of $147 million, or 2.3 percent of revenue, from the year-earlier period. Imaging and Printing revenue, which accounts for the majority of HP's operating profit, rose 5 percent to $6.7 billion and supplies revenue rose 10 percent. Operating profit was $1.0 billion, or 15.5 percent of revenue, an increase from a year-ago profit of $814 million, or 12.7 percent of revenue. Enterprise storage and servers revenue increased 2 percent to $4.3 billion from a year ago and operating profit was $322 million, or 7.5 percent of revenue, up from $180 million, or 4.3 percent of revenue, a year ago. Shares of HP trade at about 16 times the company's estimated earnings per share for its fiscal year, ending in October, and shares of Dell trade at about 16 times its estimated earnings per share for its fiscal year, ending in January. Shares of Palo Alto, California-based HP have risen 11 percent so far this year, based on Monday's closing price, compared with a 21 percent decline in shares of Dell. In extended trade, shares of HP rose to $32.15 after falling 52 cents, or 1.6 percent, to close at $31.11 on the New York Stock Exchange.

To: Sig who wrote (175544)	5/20/2006 6:19:51 AM
From: stockman_scott	Respond to of 176387

From Servers to Service: Dell's Makeover __________________________________________________________ News Analysis By Louise Lee BusinessWeek Online MAY 19, 2006 To revive growth, CEO Rollins is making a bold switch to AMD server chips and investing in customer service -- but don't expect a quick turnaround Finally! That was the response by many investors and analysts to a turnaround plan unveiled by Dell (DELL ), the world's biggest computer maker, on May 18. The Round Rock, (Tex.)-based company disclosed what it's doing to improve customer service and product quality while shaving billions of dollars in costs. It's all part of grand plan to reignite growth that stalled in 2005 after Dell outperformed rivals for years. Chief among Dell's new steps: later this year it will begin using Opteron chips from AMD (AMD ) in its high-end line of servers, ending a strategy of using machines based on chips made by Intel (INTC). Many customers and industry analysts consider AMD's chips to be more powerful than those from Intel, which has been Dell's sole chip supplier for decades. Cindy Shaw, an analyst at Moors & Cabot Capital Markets, says it's the right decision. The move will likely stimulate sales not only of the hardware, but also demand for high-margin maintenance contracts, she says. Dell share rose 4.3% to $24.99 in extended trading (see BW Online, 5/19/06, "AMD Inside"). CHIPS AREN'T EVERYTHING. It will take a lot more than AMD server chips to right the Dell ship, though. "It will not solve their greater challenges," Shaw says. Dell Chief Executive Kevin Rollins acknowledged that Dell's AMD-based servers account for "a fairly small category in terms of units. "And it's unclear how Dell's agreement with AMD affects its relationship with Intel, which gives Dell price breaks and subsidies that some analysts estimate to total as much as $1 billion a year. Intel is expected to continue to supply "the vast majority" of Dell's chips, Rollins said. Although Dell's open endorsement of AMD, after decades of buying chips only from Intel, raises the possibility that Dell may purchase AMD chips for other product categories, some analysts have said that selling more AMD-based machines would bring much more complexity and cost to Dell's business, as it would have to operate additional design, manufacturing, and marketing staffs. Executives also peeled back the curtain on a plan for improving how Dell caters to customers, an area where it has suffered significantly in recent years. This year, Dell is spending more than $100 million on improving service. Some of that is going to hire new support workers, retrain existing ones, and expand new offerings, such as a remote-repair service. Dell says it has hired more than 2000 sales and support workers in the U.S. Already, Rollins says, phone-wait times are down by 50%, although he didn't say how many minutes customers still have to hold. "Customers are more concerned about service and support," he said. CAUTIOUS RESPONSE. Investors welcomed the moves, but cautioned the impact won't be felt immediately. "It'll take a while to repair the reputational damage," says Jason Maxwell, analyst at TCW, a large Dell shareholder. "It's a longer-term fix. In the short term, it doesn't help Dell make its quarterly targets." To cut a targeted $3 billion costs, Dell said it's planning to make changes in its components and materials and in its factories. But those cost cuts may not provide much of a boost to margins and profits, since many cost reductions may simply be offset by the price reductions on its products. "They're focusing on revenue growth, service and support, and product quality, but they're not focusing on earnings growth," says Shaw at Moors & Cabot Capital Markets. Indeed, Dell plans to continue pricing its machines aggressively, especially since lowering pricing in some past quarters didn't sufficiently stimulate unit growth. But Rollins insisted, "We will see the growth.... It's hard to scale costs and investments if we shrink" in sales, he said. SLOW GROWTH. Dell's sales aren't actually shrinking, but they're certainly growing more slowly than they were a couple of years ago. Dell said sales for the quarter ended May 5 were $14.2 billion, an increase of just 6% from a year ago. Net income fell by 18% to $762 million. Dell on May 8 warned investors that its results would miss expectations (see BW Online, 05/09/06, "Dell: Burned by a Fire Sale") In a surprising break with tradition, Dell also said it isn't going to offer any more quarterly guidance. Encouraging investors to look to the long term "is more appropriate for a company our size," Chief Financial Officer James Schneider said. "So, we're ending the practice." He said Dell will provide more details and numbers at its analyst meeting in September. Until then, investors and analysts are on their own in figuring out just where Dell is in its long-awaited turnaround. "The good news is, they're acknowledging that they're in trouble," says Shaw. "The bad news is that the turnaround is not going to be quick." __________________________________________ Lee is a correspondent in BusinessWeek's Silicon Valley bureau