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

To: kemble s. matter who wrote (98697)	2/13/1999 12:15:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

Dell Earnings Preview:Dell top Estimate-(Unbiased reporting at its best) Kudos to Zdnet for writing a balanced and unbiased report. Hi Kemble: With all the hoopla that is going about DELL based on hearsay from Niles and his buddies,it is refreshing to see some unbiased reporting for a change,here is one. Most reports I saw from Reuters,wired news and others have been examples of shoddy reporting at best 'cos most of them started their reports by saying that Dell told analysts that Q4 earnings would be soft.This couldn't be farther from the truth as we all know since Dell has not said any such thing to analysts or any other schmucks. BTW I have send an email to Wired News complaining about their shoddy reporting,told them to check their facts before spewing out pure garbage and that Dell did not tell analyst any such nonsense about sales being soft etc etc. ============================= (Source:ZDnet) Saturday, February 13, 1999 Earnings Preview: Dell to top estimates, but Wall Street frets about growth By Larry Dignan February 12, 1999 2:17pm Dell Computer Corp. has become a Wall Street darling with flawless execution and boring quarterly results that usually top expectations. But Dell's fourth quarter earnings Tuesday could be interesting because sales growth may actually slow a bit. In many respects, Dell (Nasdaq: DELL) is a victim of its own success. Keep impressing Wall Street and it just keeps asking for more. Analysts agree that Dell will hit First Call Corp. estimates of 31 cents a share, but concerns about Dell's sales are surfacing. Is Dell a bargain? On Friday, BancBoston Robertson Stephens analyst Dan Niles said Dell (financials) had a weak finish in the fourth quarter because of competition in the corporate market. Niles said revenue will come in at $5.2 billion instead of the $5.5 billion as expected. Those sales, however, will represent the 20th consecutive quarter of record revenue for Dell. Niles' call echoes a similar report from Piper Jaffray analyst Ashok Kumar. Earlier this month, Kumar said in a report that if Dell reports an upside surprise expense management will be the reason. "Upside surprise could come from better expense control and/or gross margins," said Kumar, who said the company has lost some sales momentum. In the calendar fourth quarter, Kumar said Dell's worldwide sequential unit growth rate (12.7 percent) lagged behind Compaq Computer Corp. (NYSE: CPQ), International Business Machines Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: CPQ). IBM and Compaq showed unit growth of 31 percent sequentially with the once-dormant H-P posting growth of 13.9 percent. "Dell's franchise valuation is based on its superb execution, not a unique product proposition," said Kumar. "Dell has also seen its valuation enhanced by the faltering of its competitors. With Dell's growth rate moderating and better execution from its peers, the risk of multiple contraction should be factored in." Not all analysts bought into these sales concerns. Dell was maintained a "strong buy" by Credit Suisse First Boston. Pullback ahead? If Dell shares (chart) fall following its earnings report, it certainly won't be the first time. Dell shares have dipped following the last three earnings reports. Typically, shares are weak for a few weeks and then rebound. In addition to the revenue concerns, Dell will also have to top not only First Call consensus, but the so-called "whisper number," an inflated unofficial estimates. There are also rumors that Dell could issue a stock split. Dell shares have bounced in recent weeks based on rumors of a split. If there's no split investors could be disappointed. Dell optimistic In previous quarters, Dell CEO Michael Dell has laughed off Wall Street's reactions to the company's earnings asking, "What else do they want?" At the Goldman Sachs Technology Investment Symposium in New York this week, Dell certainly didn't appear worried about sales. Dell said he expects 50 percent of the company's business to come from its Web site over the next two years. Currently, about 20 percent of sales come from the Dell site. "We can sell other things through the site," said Dell. "We are in the early forms of selling software and hardware components. There's lots of opportunity to expand, but that doesn't mean we'll be selling Furbies or Ginsu knives." The CEO was also confident about the company's chances in the high-end corporate market with its storage and server offerings. "We're off to a good start," said Dell. Goldman Sachs analyst Richard Schutte said Dell has been able to get corporate customers to trade up from desktops and notebooks to servers. "The model clearly works," said Schutte. Although Dell is facing incumbents, Dell said it has been able to land large contracts from the likes of General Electric and Ford. "Incumbents have advantages, but we're viewed as a sign of change," said Dell. The computer chief said he met with a large brokerage that wanted to change suppliers on concerns about financial upstarts such as E*Trade. "They are afraid that they won't get there with the old true blue solution," said Dell in a thinly veiled reference to IBM.