Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Mohan Marette who wrote (60110)	8/21/1998 2:15:00 PM
From: Gabriel008	Read Replies (3) \| Respond to of 176387

Mohan, Jim K., Patrick, Chuzz, Meathead, JBN3, Sig, et al; my postmortem analysis for Q2 versus actual reported by DELL. Feedback appreciated. Unit sales volume: 1800 est vs 1805 actual. The 1805 represents 13.5% sequential growth for a period that excludes any significant corporate or government sales volume. This bodes well for the 3rd quarter suggesting significant sequential volume growth. [ q3f98-16%; q3f97-22%]. ASP: I estimated a 3% sequential decline and we actually came in at 2.7% decline. I believe that we're in a for a maximum 1.5% decline in Q3 which represents "no material decrease". This ASP decline is based on the fact that Q3 sales mix is more heavily skewed towards corporate and less towards the consumer market. Revenue: $4.306b estimate vs. $4.331b actual representing a 10.5% sequential revenue increase. Outstanding - Q2f97 was 3% and Q2f98 was 9%. This suggests that DELL's phenomenal growth is not slowing but, rather, increasing. Product Sales Mix: 64% for desktops - 11% sequential growth; 12% for enterprise - 21% sequential growth ; 22% for portables - 6% sequential growth. Enterprise sales growing 21% in a slow corporate quarter bodes very well for Q3. The relatively low portables sales growth suggests that this segment's sales may be increasingly skewed towards the corporate market. Storage sales kick off in the latter end of the 3rd quarter. This should provide an additional boost to normally strong Q3 sales. Geographic Sales Mix: 69% - Americas [13.8% sequential growth]; 25% - Europe [6.3% sequential growth]; 6% Asia & Japan [5.1% sequential decline]. This decline in Asia & Japan could be neutralized in Q3 with start-up of sales operations in China. Americas growth could even be stronger in Q3 with increased penetration of the South American markets. Operating Expenses. I underestimated OE by $15m in Q2. Actual was $502m or 11.6% of sales. This represented a 13% sequential increase over Q1 and was probably due to the new ad campaign. The ad campaign will continue to be expensed in Q3 and we should therefore expect OE to only decline to approximately 11.5% of sales. Average Weighted Shares: I guessed 690m vs an actual of 696m in Q2. This suggests that Q3 should be approximately 690m. Earnings per Share: 50› estimate vs 50› actual. Not a bad guess for an amateur. Based on the analysis here's my current guess at Q3. Unit Sales Volume: 2.130m - 18% sequential growth ASP: $2364 - a 1.5% sequential decline Revenue:$5.035b 16% sequential growth Gross Margin: $1.143b - 22.7% Operating Expenses: $579m - 11.5% Net Profit after tax: $402m - 8% EPS: 58›