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

To: Gabriel008 who wrote (19663)	10/29/1997 11:08:00 AM
From: jim kelley	Respond to of 176387

Gabriel, Thanks for the update. Here are my comments. >>IDC data as it pertains to DELL. >ASP:$2700...the ASP has not fluctuated in 3 quarters. With ever >increasing higher priced server & workstation sales offset by PC >price erosion the $2700 asp may remain pretty constant. DELL is making a focused effort to establish itself in the low and mid range server and workstation markets. This has the effect of maintaining and perhaps increasing margins. I believe Michael Dell said that he expectied the ASP to be flat to up. Thus, an ASP = $ 2,700 is conservative. They are now claiming to be number 1 in desktop volume and have been making serious efforts to capture GTW consumer PC business. Apparently with some success. The unit volume increases will mostly come from the desktop and laptop markets. >Gross Margin: 23%...this will increase as higher margin servers & >workstations become an increasingly important part of the product >mix; PC margins are probably the same as previous quarters due to >price reductions offset by INTC price cuts; greater manufacturing >efficiencies[optiplex plant]. I agree. This actually may also be sligtly conservative estimate of their efficiency improvements. They have mentioned that they are implementing their manufacturing improvements in their other plants as they have at the Optiplex plant. Note that CPQ had a significant improvement in their gross margins this quarter. Could be higher due to disk drive and component price reductions during the quarter that were out of synch with their planned price reductions. >Operating Expenses: 11.65%... same as Q2 I think this is a reasonable expectation. They planned to continue their hiring and training of new personel to build the infrastructure they need to sustain their growth. This threw me off last quarter as I underestimated the incremental cost associated with this growth. Could be less than this due to increased efficiency of sales over the internet. The internet now accounts for about 7% of their sales. >Average Weighted Shares: 362 million...364 million last Q. This >number should not change dramatically since it represents the >average daily number of shares in circulation for the year. >SUMMARY >Unit Sales................1240 >ASP.......................$2700 >$ Sales...................$3.348 B >Gross Margin..............$770 M [23.0%] >Operating Expenses........$390 M [11.65%] >Operating Income..........$380 M [11.35%] >Income [BT]...............$399 M [11.92%] >Net Income [AT]...........$275 M [8.22%] >Average Weighted Shares...362 M I have been using 360 M shares. >EPS.......................76›