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

To: Chuzzlewit who wrote (127911)	5/23/1999 8:53:00 AM
From: Sig	Read Replies (10) \| Respond to of 176387

Dells recent action has caused me to look back at Dells history. Although I've owned it since 1993 it has looked a bit 'peakid" lately. But thats only because I have been staring at those smooth ever-upwards exponential 100 month SI charts and forgot what a boring dog the stock can be at times. It turns out there is nothing unexpected going on recently 1. 8 months from 10-30-95 to 7-12-96 Dell starts at $1.4/sh and goes nowhere except up and down. Up 12%, down 36%- 8 months later its still at 1.4 (* prices adjusted for splits) 2. 4 months from 10-14-97 to 1-29-98 Dell starts at $12.5 goes up nil, down 24%, ends at 12.5 3. 4 months 8-25-98 to 12-16-98 Dell starts at $32 1/8 goes up 10%, down 21%, ends up even A bit discouraging, unless one remembers it gained 2700% since 1996 So it is certainly a buy-and-hold stock, but my mother never told me what kind of $#$ &&&t we have to put up with hang on to it in hard times. Every year it seems, the analysts go off on tear, trashing the industry, trashing the stock, trashing the DOW in October. So we started the last high at $54 and have been as low as $35 or about the same % drop as happened in 1996. Or its hovered around $42 which is about the equivalent to the drop occurring in 1997 A bad time for momentum players or those who just got on board but the "correction"? should end soon . When the fat lady sings, IMO Kemble will the one who is right I am also curious as to how the analysts can create an overall atmosphere of impending doom for the entire PC industry after the recent glowing reports by Ibm, Gtw, and Dell. Here are some extracts from those 10Q forms which apparently everyone except the analysts have seen by now and I put them here so they can get a better picture of the industry ... **************************************************************** In the United States unit shipments rose 39% in 1998 and 35% in 1997 due to the factors discussed above. The Asia Pacific region ("APAC") continued to achieve significant increases in unit shipments with growth of 63% in 1998 and 84% in 1997. Unit shipments in the European region ("EMEA") increased 5% in 1998 down from 20% in 1997. The Company has put new management in place in EMEA and is focusing on the top line initiatives previously discussed to address the declining unit growth. Gross profit in 1998 rose to $1.55 billion, an increase of approximately 44% from 1997. Gross profit for the consumer and business segments for 1998 was $760.8 million and $783.3 million, respectively. Approximately 40% of the gross profit increase was the result of sales growth, while approximately 60% resulted from margin productivity. Margin productivity was driven by the diversified revenue stream with Your:)WareSM bundles, effective pricing initiatives, aggressive supplier management and decreasing component costs. As a percentage of sales, gross profit for 1998 increased to 20.7% from 17.1% in 1997, improving sequentially every quarter during 1998. The increase in net revenue for fiscal years 1999 and 1998 was principally due to increased units sold. Unit sales grew 64% and 60% for fiscal years 1999 and 1998, respectively. Unit sales increased across all product lines during fiscal year 1999. The Company's enterprise systems, which include servers, workstations and storage products, continued to build a substantial presence in the marketplace, with enterprise systems unit sales growing 130% during fiscal year 1999. Notebook computer unit sales increased 108%, primarily as the result of aggressive pricing actions and the launch of new products. Desktop computer systems unit sales increased 55% during fiscal year 1999. This increase was primarily attributable to the Company's aggressive market penetration of new and higher-end products. Unit sales grew during fiscal year 1998, also the result of increased demand for the Company's products across all product lines. During fiscal year 1998, enterprise systems unit sales grew 265%, notebook computer unit sales grew 66% and desktop computer systems unit sales grew 55%, as the Company continued to introduce products utilizing the latest technology. Average revenue per unit sold in fiscal year 1999 decreased 10% compared to fiscal year 1998, partially offsetting the effects of the increase in unit sales on consolidated net revenue. The decrease was primarily due to price reductions resulting from continued component cost declines. Average revenue per unit sold in fiscal year 1998 remained relatively stable compared to fiscal year 1997. This was primarily due to aggressive pricing strategies in desktop computer systems, partially offset by increased unit sales in higher-end enterprise systems and higher-platform notebook computers. Technology revenue increased slightly in the first quarter of 1999, versus the comparable period in 1998. The increase was driven by growth in HDD storage products, storage tape products and custom logic products. That growth was partially offset by lower semiconductor revenue, primarily due to lower dynamic random access memory (DRAM) prices year over year. Although DRAM prices were down over 40 percent from the first quarter of 1998, prices have stabilized since the fourth quarter of 1998. The company continues to evaluate alternatives to mitigate the effect of memory price pressures on its results. These alternatives include realigning alliance structures, rebalancing sources of supply and redirecting product focus. During the first quarter of 1999 the company signed two major technology contracts. Dell Computers signed a seven year contract valued at $16 billion for the purchase of personal computer parts from the company. The company also entered into a five-year strategic technology and business alliance with EMC Corporation valued at $3 billion. Despite pricing pressures, Personal Systems revenue had very strong growth in the first quarter of 1999 when compared with the same quarter last year. The increase was driven by higher revenue for both commercial and consumer personal computers and a richer mix to mobile and server products. The company introduced new models across its brands - ThinkPads, commercial desk tops, Aptivas, workstations and Netfinity servers. With respect to direct channel sales, the company continued to add to its build-to-order manufacturing capability. The company further expanded its colocation program which enables channel partners to improve their inventory turnover and continues to work with its channel partners to further expand its advanced fulfillment initiative.

To: Chuzzlewit who wrote (127911)	5/23/1999 11:44:00 AM
From: Ian@SI	Read Replies (1) \| Respond to of 176387

CTC and thread, 1. Bloomberg picks Dell. bloomberg.com Essentially saying any company with consistent 40%+ growth is more than good enough for them. 2. Net Income vs Operating Income. I understand and accept the GAAP behind your statement. However, for a company such as Dell which consistently has a "huge" free cash flow, interest income is not an anomaly or a one time event. One might even regard their use of cash as another line of business which also can be expected to consistently add to earnings per share. ...even if other operating earnings were to drop to zero. Dell has the option to use the money to earn interest income; to do buy backs; or to purchase income producing assets. Any of those choices increase EPS and are almost equally desirable. IMO, Ian.