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

To: stock bull who wrote (98775)	2/13/1999 3:01:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Stock Bull, I have the full text of the Nile report in front of me. Nowhere in the report does he cite any support for his belief. All of the available data from the 4th quarter indicated that box makers had a blow-out quarter. I include data and forward looking comments from INTC and dd's, along with market research houses like IDC. This adds up to a very consistent picture. So in order for Nile's thesis to be true, the problem must be concentrated in January (because of the strange year-end that Dell has chosen). This is exactly what Nile is contending -- "We believe Dell's finish to the quarter was soft ..." Let's make some inferences here. Let us assume Nile's previous estimate of sequential sales growth was correct (13.5%). Let us also assume that his model assumed constant growth over the quarter. That would mean sequential monthly growth of 4.31%, or growth of 8.81% for the first two months. That would require that 65.25% of sales occured during the first two months (and that 34.75% occured during January). If that is true, then Nile's sales expectations according to the original model would have been around $1.9BB for the month of January, which he now revises downward to $1.6BB. That is nearly a 16% drop in one month. If you wish you can show that the drop in revenues for the affected market segments would have to be even greater. Nile cites the weakness in the corporate desktop and server markets as the culprits, which account for around 73.1% of total sales according to his model. If the shortfall were restricted to those two segments, then their shortfall would have been 21.9% The way I see it, that number is much to big to have been ignored by the industry as a whole, not to mention other analysts. Perhaps my assumptions are in error. Maybe January accounts for a much greater percent of the quarter's sales. But I can't escape the nagging feeling that something just doesn't add up in this downward revision. TTFN, CTC