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

To: jim kelley who wrote (80464)	11/15/1998 2:19:00 PM
From: Mohan Marette	Respond to of 176387

DSO: I think a little comparison is in order here. Jim: I think we need to compare the performance of DELL's asset management with that of the competition in order to get a better understanding of the situation. Just to take one main competitor (CPQ) for example: prolytix.com Gateway: Here is nother one and how they did in Q3 ....>Average unit prices (AUPs) declined 15% to $2,046 in the quarter compared to last year's third quarter and were down 7% sequentially. These declines were caused by industry-wide trends to lower priced PCs and continued reductions in component costs that have not been offset by the introduction of newer technologies. Because the strong unit sales were offset by the impact of declining AUPs, revenues increased 21% compared to the unit increase of 43% over the third quarter of last year. Revenues in the Americas region were up 27% and revenues in the Asia Pacific region were up 35% to $101.8 million over the third quarter of 1997. Revenues from the European region declined 14% from the third quarter of last year to $106.8 million. Gross margins in the quarter were at a record high level of 20.8%, up from 20.6% in the second quarter as the Company realized benefits from higher margin products encompassed under the Your:)Ware marketing program, as well as the benefits of the direct model and decreasing component costs. Selling, General and Administrative expenses (SG&A) increased 21% over the third quarter of 1997 to $264.5 million, and increased 6% over the second quarter of 1998. In both cases the increase in operating expenses is attributable to the strong unit growth experienced during the quarter. In support of the continued growth, the Company also opened a new manufacturing and sales facility in Salt Lake City late in the quarter. However, as a percentage of sales, SG&A decreased sequentially to 14.6% of sales compared to 15.4% in the second quarter. SG&A increased less than previously anticipated by management due to a continuing emphasis on cost control measures. Operating income for the third quarter this year was $113.4 million compared to a loss in the third quarter of the previous year of $24.0 million before nonrecurring expenses. Operating income increased 35% sequentially over the second quarter. Other income increased to $12.7 million, up 125 % from the prior year and up 16% over last quarter due to increased balances of cash and marketable securities. Pre-tax income was $126.0 million compared to a loss, after nonrecurring expenses, of $132.2 million in the third quarter 1997. The Company's effective tax rate for the quarter was 36%, consistent with previous quarters this year. The effective tax rate increased over last year due to shifts in the geographic distribution of the Company's earnings. Additionally, the abnormally low effective tax rate experienced in the third quarter of last year resulted from the non-deductibility of certain nonrecurring expenses. Working capital management improvements were made again this quarter. Inventory turns reached another record high for the Company at 33 turns, which is up from the 12 turns at the end of the third quarter last year and the 30 turns achieved in the second quarter of this year. The cash conversion cycle was reduced to almost a negative 4 days. Cash and marketable securities hit a record level in excess of $1 billion at the end of the quarter. .. gateway.com