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

To: JRI who wrote (101233)	2/16/1999 9:49:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 176387

John, Here is the evening story on Dell from the WSJ Interactive site. Seems like Mikey's tone has changed a bit, last week he was talking about how Dell was 'on a tear', now he is talking about the need for 'increased operational efficiencies'. If I didn't know better, I'd say he is starting to sound like '5fer'. Nah, couldn't be.. <ggg> Regards, John Dell's Shares Fall After Close As PC Maker Meets Estimates An INTERACTIVE JOURNAL News Roundup Dell Computer Corp. reported results late Tuesday that met analysts' expectations as revenue surged 38%, and approved a two-for-one stock split. But disappointed investors sent the company's shares lower in after-hours trading. For the fourth quarter ended Jan. 29, the Round Rock, Texas, personal-computer maker reported net income of $425 million, or 31 cents a diluted share, a 55% gain from $285 million, or 20 cents a share, in the year-ago quarter. That was in line with the consensus estimate of analysts surveyed by First Call. Revenue, meanwhile, increased 38% to $5.17 billion from $3.73 billion in the year-ago quarter. The stock split, the company's seventh in as many years, will be issued on March 5 to shareholders of record as of Feb. 26. While the numbers looked typically gaudy for the direct-sales giant, the revenue figures were shy of analysts' projections that ranged from $5.2 billion to $5.6 billion. In after-hours trading, shares of Dell fell to $84 from their close on the Nasdaq Stock Market of $88.75. The company's shares fell nearly 12% Friday after analysts at BancBoston Robertson Stephens and Salomon Smith Barney warned that the company faces tougher competition as other PC makers cut costs and shift their business models to include more direct sales. That has taken away some of the advantage Dell has enjoyed from its direct-sales model. Dell is "well positioned for continued industry-leading growth in the coming year," said Michael Dell, the company's chairman and chief executive officer, while acknowledging that the PC industry "remains highly competitive, underscoring the need for greater operational efficiencies." Dell said its gross margin increased to 22.4% from 22% in the year-ago quarter, while operating expenses declined to 11% from 11.4% a year ago. As a result, operating margin rose to 11.4% for the quarter, compared with 10.6% a year ago. Revenue rose 39% over the year-ago quarter in Dell's Americas region; 40% in Europe; and 30% in the Asia-Pacific region, including Japan. Online sales also remained strong: Dell reported customer sales via its Web site of $14 million per day. Mr. Dell said the company saw "substantial opportunity in fiscal 2000 to grow significantly faster than the industry rate and once again to increase our market share." He said the company intends to "significantly expand" its Internet offerings, and added that demand for PCs appears solid. CIBC Oppenheimer Corp. analyst James Poyner said before Dell's earnings were released that competition in the corporate PC market -- particularly from International Business Machines Corp. and Compaq Computer Corp. following its purchase of Digital Equipment Corp. last year -- has been heating up for some time, forcing Dell to cut prices. Both IBM and Compaq also have been increasingly tying PC sales to server sales -- putting Dell, which does most of its business in PCs, at a disadvantage, Mr. Poyner added. Dell also has lost some of the advantage of its direct-sales model as PC-component prices have firmed up. That is because Dell's direct-sales model allows it to quickly take advantage of falling component prices and pass them onto its customers. But now that prices have firmed, Dell -- like all of the computer makers -- must still hold its prices down to make sales, Mr. Poyner said.