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

To: Mohan Marette who wrote (115866)	4/9/1999 11:30:00 PM
From: CGarcia	Read Replies (2) \| Respond to of 176387

Will Tuesday be a buying opportunity for Dell?

To: Mohan Marette who wrote (115866)	4/10/1999 12:35:00 AM
From: BGR	Respond to of 176387

Mohan, Note that CPQ expects to miss revenues by about the same margin DELL missed last quarter (9.8BB vs. 9.4BB), but is going to miss earnings by 50%, where DELL hit earnings. IOW, selling boxes at or below cost may generate a lot of sales, but is a major drag on the bottom line. CPQ needed doubling of sales - and remember that is on top of unit growth which was robust for the industry - to make their earnings. Problem is, they would need to further undercut margins to make that kind of sales increase, which would then require more sales to make up earnings ... a vicious cycle. This is so similar to IBM's situation which went ahead and lost money outright. :-) CPQ, in essence, is playing AMD. Now I do understand AMD's position, as they are the challenger. But CPQ and IBM's actions are beyond comprehension for me. Contrary to what some analysts say, margins count. Well, unless you are Amazon.com, who is destined to inherit the earth ... -BGR.