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

To: larry who wrote (80206)	11/14/1998 9:49:00 AM
From: TCGNJ	Read Replies (2) \| Respond to of 176387

Thread, This is from the Motley Fool. Kind of a good perspective on things. fool.com TCG ___________________________ Dell Computer (Nasdaq: DELL) fell $5 1/4 to $63 15/16 after reporting another quarter of solid results last night. The company reported a 51% year-over-year increase in Q4 revenues of $4.82 billion and a 65% increase in EPS of $0.28. That amounts to sequential growth of 11%, which translates into annualized growth a percentage point better than the 52% year-to-date revenue growth the company also reported. Capital productivity again was stellar, with return on invested capital (ROIC) of 190%. If anything could be argued on this score, it would be that ROIC for the quarter was down from last quarter's 217%. With a company that is building infrastructure so quickly, though, a 27 percentage point decrease in ROIC can't be that badly criticized, as infrastructure never grows in a fully linear fashion. Lots of noise has been made today about the negative call Piper Jaffray analyst Ashok Kumar made on the company's desktop unit growth slowing during the quarter. The story for the quarter isn't just desktops, but overall sales and unit growth in all categories, including laptops, workstations, and servers. Which is more important: 11% sequential growth in units for $1,800 desktops, or 16% sequential growth in laptop unit sales and 29% sequential growth in enterprise unit sales? Dell can hardly be faulted on its desktop unit performance when you look at the overall product mix and maintenance in average selling price sequentially, especially when a shortage of Xeon chips held back enterprise growth during the quarter. The slowing-desktop-unit-growth thesis as a bottom line assessment of the quarter is way off the mark and is blind to the real story of how well Dell did this quarter.

To: larry who wrote (80206)	11/15/1998 12:05:00 AM
From: BGR	Read Replies (1) \| Respond to of 176387

Larry, In other words, analysts are expecting DELL to have about 3% growth from 4Q 99 to 1Q 00, but consistent 10% growth in the following 3 quarters. Sounds rather inconsistent to me. Now, if 1 Q 00 is upwardly adjusted to 33 cents (10%) and the following quarters are adjusted accordingly, we have 33, 36, 40 and 44 cents respectively. Assuming an average 1 cent per share upward adjustment as the fiscal year progresses (as DELL has historically underestimated growth) and that DELL beats estimates by an average of 1 cent (again, as DELL as historically done), we arrive at 1.61 earnings for fiscal year 00. This puts us at about 55% EPS undiluted, about the same as this quarter's. Now add share buybacks to taste to adjust the diluted EPS up. Please note that the company has outstanding authorized share buybacks of about 10% of outstanding shares as well as a formidable cash flow which is showing no signs of slowing up. -Apratim.