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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Miller who wrote (15981)	12/28/1997 11:50:00 AM
From: j g cordes	Respond to of 50167

Jerome.. Chill Out.. your reaction to the LATimes article, Zowwie! First, the writer probably did misrefer the Dell forecast from the SmithBarney analyst commentary. It dosen't get an A+ in my opinion, but it dosen't deserve calling it a "lie." The writer makes many good points in the article, indeed a slightly larger view of the small quote you took is positive on DELL. "...but potentially good news for computer makers like Dell. Yet any gains from chip prices could be offset by lost sales in Asia--which is why Dell forecast an earnings slowdown last week. "This Asia problem is going to drive . . . probably the worst calendar fourth-quarter earnings season that we've seen in the past three or four years," said computer industry analyst Peter Swartz at Salomon Smith Barney Holdings Inc." In all its a timely article. Regarding DELL's minimal public relations messages at their site, it would surprize me to find DELL ever putting a less than confident spin on anything they do... Note also that it said an "earnings slowdown," not less, or fewer, but a SLOWDOWN, which to me implies a slower pace of growth. Looking back at the very strong quarters, especially last year's.. it wouldn't surprize me that someone at DELL mentioned at a private analyst's meeting (perhaps SolomonSmithBarney) that the pace has slowed because of Asian currency and South Korean and Japanese consumer ability to spend. DELL's sales could be up, its market share could improve AND its pace of growth could still be down. Next point I'll make is this.. DELL's stock price since its highs in October has been chopped 20-25%. That's a pretty good slice of profit for anyone who bought then. Much of this loss in value came before the Asian problems started making front page news. Someone is selling. Last point, Michael Dell is obviously committed to upholding his company's stock value. In addition to putting out amazing company growth/profit against strong competition he's put in place a stock buyback plan. This may just be a good use of their more than adequate cash needs for continuing market and product development. The LATimes was not alone in its suggesting DELL and others are prone to a "growth slowdown." Here, Mohan refers to Briefing's commentary on many techs possibly having problems exchange2000.com And here's another reference to PC valuations: exchange2000.com Friday, December 19, 1997 Dell shares off $2.75 on demand concerns Friday December 19 2:18pm Eric C. Fleming, ZD Inter@ctive Investor Shares of direct computer maker Dell Computer Corp. slid $2.75 to $78.00 as investor concerns about Asia and declining domestic demand were exaggerated by the holiday sales push. Computer resellers, such as CompUSA Inc. and MicroAge Inc., may have signaled the slide last weak when their earnings were hurt by weakened demand. As these direct distributors to businesses are hurt by slack demand, it can indicate a softening across the industry that affects direct PC makers such as Gateway 2000 and Dell. Direct PC makers build computers without having a large number of assembled machines on hand and they use sales forecasts for their competition to gauge demand. If Dell's competition is forced to lower prices to clear out inventory, then Dell will be forced to match the price cuts. "With PC sales growth on the decline," said Daniel Niles, BancAmerica Robertson Stephens analyst, "an investor can look at the valuations, and see that it may be time to get out [of the PC sector]. " So I'll ask you, ".. lies" or just a hasty LATimes writer, or is this the writing on the wall we should be paying attention to? Jim