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

To: Ian@SI who wrote (114353)	4/5/1999 6:05:00 PM
From: H.A.M.	Read Replies (2) \| Respond to of 176387

Dell Investors Awaiting Company's New Recipe for Sales Growth Round Rock, Texas, April 5 (Bloomberg) -- Dell Computer Corp. Chairman Michael Dell could face a tough crowd when he meets this week with investors and analysts seeking answers about slowing sales at the No. 1 direct seller of personal computers. Dell shares, a bull market star, faltered in February when the company reported fourth-fiscal quarter sales that missed analysts' forecasts. That sent the shares skidding, as investors worried that plunging PC prices would make it tough for Dell sales to match the 50 percent rise of past years. When Dell and other executives go before analysts on Thursday at the Pierre Hotel in New York, their message is expected be one of reassurance. Some investors and analysts already are predicting an upbeat forecast, sending Dell's shares up 2 7/8, or 7 percent, to 44 1/16. ''It's more a hand-holding meeting,'' said Timothy Ghriskey, a senior portfolio manager at Dreyfus Corp. in New York, which owned about 1.8 million Dell shares as of Dec. 31. Dell shares touched a record high of 55 on Feb. 2, then tumbled as low as 35 3/8 on March 23. It was uncharacteristic swoon for the company whose stock was the best performer in the Standard & Poor's 500 Index for the three years ended last December, rising about 34 times in that span. In the last seven trading days the shares have climbed 15 percent as many investors anticipate a positive report from the company. Good Times To convince investors that the good times aren't over, Dell must talk up its newest and most profitable products such as data- storage equipment, powerful servers and Internet service. At the same time, Ghriskey said he expects the company to downplay prospects of selling PCs aimed at entry-level buyers. ''They'll de-emphasize the concept that that market will dominate PC use,'' he said. Dell has resisted the bargain-basement PC market because it's harder to make money there. But the low-end market is growing faster than the rest of the PC business and some analysts worry that Dell must enter the fray or risk losing sales to rivals such as Compaq Computer Corp., which already offer PCs for $600 without a video monitor. ''They have to get into it,'' said Dan Niles, an analyst with BancBoston Robertson Stephens in San Francisco, who rates Dell ''market perform.'' Yet, ''you get into that sector and your margins will go down.'' Ghriskey said he expects Dell to offer cheaper machines, but avoid a costly effort to dominate the market. He believes the company will tout the advantages of more powerful, more expensive models as well as high-margin services and PC add-ons such as scanners. No Designs For now, Dell said it has no designs on the low-end market. ''We won't go there or anywhere else just to enhance revenue,'' said Dell spokesman T.R. Reid. ''If we can find a way to (build cheaper PCs) profitably, then we may.'' Not every analyst is fretting about cheap Dell PCs. Lou Mazzucchelli, an analyst for Gerard Klauer Mattison & Co. points out that Dell sells PCs to corporate customers for less than $1,000, and he believes the company can sell comparably priced machines to consumers and still make money. Some investors are just as confident that Dell can wring more sales and earnings growth out of PCs. ''If anyone is going to do it, it will be Dell,'' said Duane Eatherly, a money manager at Banc One Investment Advisors in Columbus, Ohio, which owns about 3 million Dell shares. Dell and other PC makers are fighting declining prices on desktop and notebook computers. The company's average price for those two products fell 6.4 percent from the fiscal third quarter to the fourth quarter, Poyner estimates. Dell has been trying to offset those declines by beefing up corporate sales. That didn't work as planned in the fourth quarter, as mergers among corporate customers, cost cutting and a focus on fixing Year 2000 computer problems led to a 38 percent rise in revenue. It was Dell's smallest sales gain in more than two years. Michael Kwatinetz, an analyst at Credit Suisse First Boston Corp., predicts Dell will use Thursday's meeting to outline a broader range of products and services. He predicts that sales in Dell's first quarter, which ends April 30, will rise about 38 percent. That would match the fourth-quarter's gains, though it lags the 50 percent gains that became Dell's trademark in the past two years. 16:49:42 04/05/1999