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

To: jhg_in_kc who wrote (72108)	10/14/1998 7:49:00 PM
From: stockman_scott	Respond to of 176388

The Latest Update From Compaq.... Wednesday October 14, 7:23 pm Eastern Time Compaq sees no 1999 sales slowdown HOUSTON, Oct 14 (Reuters) - Compaq Computer Corp. does not foresee a slowdown in spending on technology next year, at least not in its main markets, Chief Financial Officer Earl Mason said Wednesday. He told Reuters in an interview that sales in North America and Europe, from which Compaq draws 85 percent of its revenues, were strong and would continue to be so because of continuing demand for better, cheaper technology. ''What's driving the market right now are Year 2000 conversions, cost-reduction activities in general and the Internet,'' Mason said. ''I don't see (a slowdown) happening, at least not in Europe and North America,'' he said. Mason said Compaq's third quarter sales in Asia were hurt by the region's financial turmoil and were down 9 percent in some segments. No quick improvement is expected. ''It probably will (stay down) for a couple of more quarters. I don't think these things get fixed overnight.'' Compaq said Tuesday it had earned $115 million, or 7 cents a share, on revenues of $8.8 billion in the third quarter. Analysts had predicted 6 cents a share on revenues of $9 billion Mason said revenues did not quite match estimates because of a $100 million ''currency impact'' in Latin America and Asia and the quicker-than-expected phasing out of computers produced by Digital Equipment Corp, which Compaq bought earlier this year in a transaction worth $8.4 billion. ''There are always little blips and what I'll call product shortages of one sort or another, but those were the two big things,'' he said. Mason said earnings had beat estimates mostly because of reduced costs associated with the Digital deal. ''We ended up taking a lot of costs out of the company. We took out 5,400 people in the quarter, on top of the 900 people we took out in June, so we were right on track in reducing the cost structure,'' he said. Compaq said after buying Digital that it would eliminate 17,000 jobs. Mason said the company believes the Digital purchase will add to earnings by the fourth quarter. Asked how much it would add, he said, ''What I've told the world is that we have a 37-cent First Call estimate -- and a penny above that for me is victory.'' Asked if he were comfortable with the 37-cent estimate, he said, ''Yes, yes we are.'' The company's other key undertaking has been reducing a massive inventory glut that forced it to slash prices and cut manufacturing in April. At the end of June, its inventory level stood at 3-1/2 weeks, but Mason said it was now down to three weeks and would likely stay in that range. ''They went down to three weeks. We said we wanted to operate in a band of three to four weeks, everything in...we're operating at the lower end of that goal right now,'' he said. Mason said it was possible the inventory level could drop further, but that the focus now was on increasing the rate of internal inventory ''turns.'' ''This quarter we made an improvement of over one turn..right now, putting Digital in, we're a bit over 12 turns'' a year, he said. Last year Compaq began implementing a program to increase its direct sales to customers. Mason said 15 percent of sales are now through retailers. He would not say what percentage are direct. ''But I can tell you that more and more of our sales every day are becoming more direct,'' he said. ----------------------------------------------------------------- Hmmmm.....Compaq doesn't like to reveal their direct online sales figures. I wonder why? IMO, they are not significant and Compaq doesn't want to be embarressed. Oh well, there is always room for improvement. Yet, If CPQ is doing well in their overall performance, then DELL should be doing VERY WELL !!!!! We know who has the superior business model. -Scott

To: jhg_in_kc who wrote (72108)	10/14/1998 9:14:00 PM
From: nihil	Respond to of 176388

RE: No cloud! No computer manufacturer is better insulated from a rise in component prices than Dell which has 8 days inventory, on average. It is risky to speculate on inventory, especially when it becomes obsolete in a few weeks. Dell would absorb a rise in component prices for only a brief period, but would very quickly reflect them in its prices only if other component prices did not decrease rapidly enough to offset. An increase in memory prices could lead buyers to buy now to beat inflation or decrease from 64MB to 32MB especially in a configure you own store like Dell. I doubt other component price rises could ever rise rapidly enough in dollars per unit to offset the steady and rapid decline in Intel microprocessor same chip prices over a period of a quarter which will continue indefinitely into the future.