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

To: Chuzzlewit who wrote (105511)	2/26/1999 7:28:00 PM
From: Lizzie Tudor	Respond to of 176387

Yes thanks to Chuzzlewit and Jim Kelley for explaining these details. What happened to rudedog btw?

To: Chuzzlewit who wrote (105511)	2/26/1999 10:27:00 PM
From: JRI	Read Replies (3) \| Respond to of 176387

Chuzz- Maybe I should rephrase....There was no way Compaq was going to report a .20 quarter....Some of the .21 difference (between reported earnings and Jim prediction) was stuffing, no doubt....How much? Who knows for sure...but likely quite a few more cents were "allowable" (at least, until now) accounting tricks (like the massive write-offs in Q2 & Q3) which helped lower expenses in Q4 or the factoring that you mentioned... Even still, you have the more important point (by far)..Dell is clean, Compaq is not only simultaneously fluffy and complex, but the numbers reek a little, too... People (analysts, commentators) love to talk about how much greater Dell's PE is vs. Compaq's....surely, Dell should receive a healthy premium (all things being equal) because of the clean numbers...

To: Chuzzlewit who wrote (105511)	2/27/1999 3:01:00 PM
From: jim kelley	Respond to of 176387

Re; Channel Styffing at CPQ et al. Paul, This nails down the stuffing even better . The 22 days are a little low. Questions, questions. March 01, 1999, Issue: 831 Section: Research & Analysis: The Numbers Sheet Revisiting 4Q Channel Sales And Inventory Robert Anastasi Our original thoughts and estimates for PC sales through distribution channels, published in late December, showed reasonably steady demand (20 percent year over year for distributors and 7 percent year over year for corporate resellers). Yet, a large number of sales shortfalls have since been announced by channel players, including CompuCom, Ingram Micro, Inacom and Merisel. Moreover, sales results for Compaq and IBM did not appear particularly robust but were explained by channel inventory reductions. Interestingly, our quick analysis of channel inventory suggests it rose, not fell, in December. With actual results now in for the majority of companies, we decided to revisit 4Q sales and inventory. We now estimate sales growth through wholesale distributors at 15 percent, well below the 18 percent to 20 percent pace experienced earlier this year. The common perception of slower distributor growth is that vendors are going direct to customers and around the distributor. This is way overstated as an explanation for 4Q sales. For example, the only major direct program we are aware of is Compaq's Prosignia line through its Direct Plus Web site. Compaq indicates Prosignia sales reached the $1.0 million per day mark in 4Q. Assuming that all of this came out of the hides of wholesalers, then 0.7 percent of sales growth could be added back to distributor growth-only 15 percent of the shortfall. However, this is exaggerated because distributors and resellers that are co-located with Compaq in Houston, sold Prosignias in 4Q. A real variable that helps to explain stronger 3Q and weaker 4Q distributor sales: the acute product shortages experienced in 3Q, which stimulated more than the usual second sourcing from distributors (because they had product). In 4Q, good availability shifted sourcing back to a normal level direct from manufacturers. Assuming this accounted for as much as half of Ingram Micro's U.S. shortfall, it explains another 1.4 percent of growth. Perhaps the biggest surprise when we revisited actual results vs. forecasted channel data was as an uptick in channel inventory to 38 days from 35 days. Admittedly this is a sampling of only the biggest inventory pools but reported figures, plus a few estimates, suggest a rise as opposed to the decrease that PC manufacturers have discussed. Consequently, it appears to us that sales into the channel may have exceeded sales out in 4Q. Obviously, this helps companies upstream in the PC supply chain. To a large degree this increase probably relates to lower than expected 4Q sales for distributors and lower than adequate 3Q inventory. In absolute terms, channel inventory rose about 17 percent sequentially, higher than the normal sequential sales uptick. In fact, distributor sales grew only 7 percent sequentially this year, compared with 12 percent to 15 percent increases over the past three years. The Robinson-Humphrey Company, LLC. or one or more of its officers or employees may from time to time have positions or options in, and may, as principal or agent, buy or sell such securities. ROBERT ANASTASI is managing director of The Robinson-Humphrey Co. LLC, an investment-banking firm based in Atlanta.