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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (55354)	4/9/1999 10:20:00 AM
From: RealMuLan	Read Replies (1) \| Respond to of 132070

Mike: this is from Street.com. This does not help Dell stock. <<Dell's Analyst Day Focuses on Everything but PCs By Eric Moskowitz 4/8/99 5:38 PM ET If Dell (DELL:Nasdaq) truly wants to become a global player, it's going to need some help, according to analysts attending Dell's 4 1/2-hour-long financial analyst day in New York Thursday. That help is expected to come from none other than IBM (IBM:NYSE), which recently signed a five-year, $16 billion product agreement with Dell and is widely expected to be its global services partner of the 21st century, according to Ashok Kumar, PC analyst at Piper Jaffray. "A long-term licensing agreement to pair IBM's global services with Dell's PC division would be a long-term catalyst for Dell," says Kumar, who rates the stock a buy and has done no underwriting for the Austin, Texas-based company. After years of super-fast growth, Dell fans howled with despair at the company's fourth-quarter results, announced in February, which showed only a 38% growth rate vs. the company's two-year average of 56%. The stock fell 30%. Analysts and money managers went into this New York conference expecting some reassurance. Of course, many analysts counted on Dell to use this event to boost morale: The stock has shot up 20% over the last two weeks in anticipation of the meeting, recovering two-thirds of what it had lost after the company reported fourth-quarter earnings. Dell's stock ended down 1 7/16, or 3.1%, at 45 Thursday. The global plans had analysts wondering which other candidates could become a Dell partner. One surprise candidate being thrown around by analysts as a global services partner Thursday was the Texas-based electronic services and technical consulting firm EDS (EDS:NYSE). Dell already uses EDS for high-end services support. "The real purpose of the meeting was to divert attention away from the company's core corporate desktop business," says Goldman Sachs analyst Rick Schutte, who rates Dell a buy and has done no recent Dell underwriting. Schutte points out the corporate desktop space is saturated right now, and growth and margin levels will need to be maintained by aggressively competing in the server and storage spaces. CFO Tom Meredith said the company had 300 storage customers at the end of the fourth quarter and were looking to double that amount in its first fiscal quarter, which ends April 30. Analysts joked that Meredith was saved for last at the conference so analysts wouldn't bolt out the door. A combination of servers and storage gives Dell a chance to diversify its high-end business, says Randy Befumo, an analyst at Legg Mason Fund Adviser who is also a researcher for two Legg Mason funds, Value Trust and Special Investment Trust that have significant holdings in Dell. In terms of first-quarter earnings, which will be announced in mid-May, Goldman's Schutte noted that according to Meredith, Dell expected to earn $1.4 billion to $2 billion from services, or anywhere from 8% to 11% of the company's $18.2 billion in annual revenues last year. This meant that the company will be more geared to services, says Amir Ahari, senior analyst at International Data, who was at the event. That's a timely approach as computer prices are still heading down. Analysts also heard that Dell will continue to "tiptoe" around the sub-$1,000 issue, preferring not "to embrace the $499 to $699 price points," says Kumar. Dell's ASP, or average selling price, is still above $2,300 per PC, the highest in the industry. Still, if the consumer PC prices remain in the $500 to $700 range, that could send ASPs lower at a more rapid clip. Says Befumo: "The ASP decline appears to be getting pretty significant." >>

To: Knighty Tin who wrote (55354)	4/9/1999 10:32:00 AM
From: RealMuLan	Read Replies (1) \| Respond to of 132070

I have some problems with this potential IBM-Dell co-op. 1) At the moment, they are still head-on competitors. In most cases, one party's gain is another party's loss. Today's news is that IBM goes on-line direct too. 2) Say if Dell takes over IBM pc business, what is the gain for Dell? There is a big difference bet. IBM and Dell pc price. So how can Dell keeps the high margin on its own original brand. And who will buy higher-priced Dell computer instead of lower-price IBM pc if they know the components come from the same manufacture or made on the same Dell assembly line? Mike, maybe you can give it a better explanation? Thanks a lot. Best.

To: Knighty Tin who wrote (55354)	4/9/1999 11:28:00 AM
From: David Rosenthal	Read Replies (1) \| Respond to of 132070

MB, <I am a gallium arsenide fan, but the price is out to lunch. > I prefer the Gipsy Kings. Less toxic and definitely worth the price of admission. Dave

To: Knighty Tin who wrote (55354)	4/9/1999 11:36:00 AM
From: Mark Adams	Respond to of 132070

VTSS: Thanks Mike. I like the technology too, though occasionally hear about other technologies that can might prove more cost effective some day. I see we lost $6 on 'sell the news'. I suppose that helps, but I figure a stock price of $20 would be more like it. Of course, to obtain that we would see incredible values all over the market, so this probably isn't the best put candidate. However, Insiders have certainly not been shy about taking some money off the table recently... biz.yahoo.com