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

To: Patrick E.McDaniel who wrote (41292)	5/11/1998 10:18:00 AM
From: Gabriel008	Respond to of 176387

Patrick, here are my estimates for this quarter. * Unit sales Volume:1.60 million. 11% sequential growth vs Q4 & fairly close to Dataquest's 1.537 number [Dataquest has historically underestimated DELL sales volume]. * ASP: I suspect that DELL will not experience price erosion for 2 primary reasons: 1- the increasing importance of server, workstation and portables business and the higher ASP's associated with these. 2- the increasing importance of their European business. Last quarter the European business accounted for 25% of units & 27% of revenues. This quarter European units may account for 27% of overall volume and maybe as much as 30% of total revenues. I'm staying with a $2600 ASP. * Gross Profit: same as Q4,98 for the reasons outlined above plus the fact that customer price reductions are being offset by component cost savings. I've left the GP at 22%. * Net Profit After Tax: 7.66% - just a touch higher than Q4,98 since I believe their % operating costs [as a percentage of revenue] may continue to go down [I've assumed 11.3%]. I've also included $17 million in additional income from other sources[over & above operating income]. * Shares outstanding [weighted average]: in order to calculate the diluted eps I've used 690 million shares. In Q4,98 there were 706 million outstanding and the previous quarter's was 721 million. I'm assuming a fairly orderly repurchase pattern. * EPS: 46›

To: Patrick E.McDaniel who wrote (41292)	5/11/1998 4:55:00 PM
From: jim kelley	Respond to of 176387

Patrick, I am assuming that DELL sold about 90 K enterprise units this quarter with 1539 of the desktops and notebooks etc. Note: Dataquest is now excluding the enterprise PC servers and workstations from their estimates. They did not have to do this a few quarters ago when sales of these units were quite low. This gives 1629 units as the target estimate. This yields revenues of 4.234 B. Allow for the normal error variance of ~+ - 1%. I am assuming like while desktop ASPs are eroding that notebooks and enterprise sales increases are picking up the slack. So I am holding ASP and margins the same as last quarter. It is really difficult to guess the net profit margin since DELL has a choice of trading off growth rate for margin due to the price elasticity. Now, I am guessing that the EPS will be 48 c/share. Margins could be higher than expected. Every half % is worth about 2 c/share.