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

To: SecularBull who wrote (126073)	5/18/1999 4:34:00 PM
From: Eski	Read Replies (2) \| Respond to of 176387

Your right their financials are the tops in the business but read the tape the market don't think so, why is it down in afterhours.

To: SecularBull who wrote (126073)	5/18/1999 5:59:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

Things to like and things to not like .... First, what's to like: Revenues were up 41% yoy. This is important because it shows that Dell continues to gain market share at the expense of the other box makers. Operating Revenue up 40% yoy. Again, a decent number. ROIC increased to 189% from last quarter's 170%. Unfortunately, Dell does not indicate exactly how it calculates this metric, so I cannot reproduce it. CCC decreased by 2 days -- an excellent result. The use of the internet resulted in excellent cost control, with operating expenses increasing much more slowly than sales. The high-margined lines (enterprise) grew fastest. What's not so good: Gross margins eroded fairly substantially from last quarter's 22.4% to 21.5%. This decrease was not unexpected following last quarter's revenue disappointment. Gross profit increased only 36.2% yoy. Operating income was virtually flat (0.9% over last quarter). Most of the increase in income came from interest. ASP continued to slip. This quarter it fell by roughly 2% from the previous quarter, and is down by roughly 8% yoy. Dell is sitting on a huge amount of cash and marketable securities --more than $4 BB. Why? These assets are not productive. In spite of the fact that Dell repurchased 1 million shares this period there was a slight increase in the number of basic shares o/s, and only a small decrease in fully diluted shares. Are we beginning to see substantial dilution through liberal ESO plans? Comments: While the operating earnings may disappoint some when looking at the short run, the results seem to confirm that Dell can earn money in an environment which has become increasingly difficult for its competitors. Dell may ultimately be the largest beneficiary when one or more of Dell's competitors opts out of the market. I think that Dell has continued to demonstrate the kind of solid operational results we have come to expect. But it is also obvious that Dell's growth is slowing. CTC