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   Technology StocksDELL: Facts, Stats, News and Analysis

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To: Mick Mørmøny who wrote (324)9/7/1999 6:39:00 PM
From: Mick Mørmøny
   of 335
Dell Computer: Amazing Growth

Dell Computer (Nasdaq:DELL - news) makes boxes, computer boxes. And it makes more of them than most other companies. In the most recent fiscal quarter, it showed an amazing 42% revenue growth from the same quarter a year ago. Everyone who thought the company had to slow down was wrong. Now the question is: how does it keep growing, not just in revenues but in profitability?

Computer makers like Compaq (NYSE:CPQ - news) , Gateway (NYSE:GTW - news) and Dell have seen the Average Selling Price (ASP) for most computers continue to go lower. As the prices go down, so does the profitability. In order to maintain profit growth, it means the box maker has to either sell more computers and/or build higher value added computers. Unless the computer market continues to expand, the only way one manufacturer can sell more computers is to take market share from a rival. Fortunately, the market has kept expanding, though not at the rapid rate of only a year or two ago. No one understands this market better than Dell Computer, and its strategy is to have it both ways: more market share and more profitability.

The fiscal second quarter (July) showed the results of the strategy: revenues up 42% from the previous year; up 41% from the fiscal first quarter; earnings per share were 2 cents ahead of expectations, coming in at $0.19; that's 50% above last year's report and 19% above the previous quarter. The gross margin for DELL in the quarter was 22%, up 50 basis from the first quarter. The Internet sales growth was nothing less than astounding: $30 million of equipment a day vs. $18 million a day in the previous quarter. Those sales represent 40% of its revenue, and the corporate goal is to have them at 50%. With the strong cash flow, the company repurchased 17 million shares.

According to Morgan Stanley Dean Witter the elements that add up to this success are:

>>> the Internet has been effectively used as a sales tool
>>> a focused effort to regain sales momentum in Europe (22% of sales)
>>> new service and additional product sales efforts
>>> enterprise product and service growth (this is where the higher profitability is for the company)
>>> solid government relationships and sales as the government works on Y2K solutions

With these pistons firing, the consensus among analysts is that fiscal year earnings for 2000 will be $.72, and for 2001, $.98. Morgan Stanley has their estimates at $.77 and $1.03 for the same time periods. There is an analysts' meeting in Austin, Texas, on October 7 and look for upbeat reports and higher estimates from more analysts after that.

A new area for Dell is data storage. That means they're taking on EMC (NYSE:EMC - news) , IBM (NYSE:IBM - news) , and several other big names. But the competitive advantage Dell has: it makes and sells the servers that need the storage capability. That gives Dell the first crack at clients setting up servers for the first time as well as companies upgrading. Data storage is a very profitable part of the computing world, and while competition is extremely tough, Dell has already shown its ability to survive and thrive in one of the roughest segments of the computing business.

Furthermore, Dell sees four key areas where there is room for expansion:

>>> consumer and small business
>>> global expansion
>>> services
>>> enterprise computing systems

Management estimates there might be as much as $10 billion of revenue increase if these areas are properly developed.

So what does all the growth and optimism cost? At the time of this writing, with the stock at $49.50, the P/E is 64 when using the $.77 estimate for fiscal 2000 from Morgan Stanley; it's 69 when you use the consensus estimate of $.72. It gets closer to its growth rate when the 2001 estimate is in the equation: a P/E of 48 with the $1.03 from MS, and 50 when the consensus of $.98 is the denominator. Estimated growth rate is near 40% for both revenues and earnings. That means the stock is selling at about 1.5 times its growth rate for next year, and about 1 time for the year 2001 report. With that type of valuation, there isn't any room for a slowdown in sales. Investors have already bought into Dell's program and are true believers. If there is a slip-up in growth, revenues or earnings, this stock is vulnerable. It suffered that fate earlier in the year when it announced earnings right on the mark but the revenue growth had slowed.

Dell is a great company and is a leader in its group. It's the kind of stock that deserves watching and when there is an adverse quarter or announcement, an investor can buy it at a reasonable valuation. Right now, with a P/E ratio of almost twice the average P/E of the S&P500, with a P/E ratio that is the highest in the company's history both in absolute and relative terms, it's a stock that needs to grow even faster than expected if it's going to keep heading north.

- Ted Allrich
The Online Investor
Sept. 06, 1999

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To: Mick Mørmøny who wrote (323)2/10/2000 9:08:00 PM
From: Sonki
   of 335
dan niles $50 target: DELL reported 4Q earnings today of 15c/share, inline with expectations; 50% of revenues came from

Dan Niles mentioned that he had downgraded the stock in 10/99 just before the first earnings warning, then upgraded on the pre-warning announcement.

DELL basically re-set its expectations to where they needed to be.

Revenue is important thing to note; they came in at $6.8 billion, above the $6.7 billion expected. Conference call will be later, but the press release gives a bit of a preview. Some of the positives include:

- DELL now accounts for 40% of the growth in the server market; grew its market share here from 2% in 1995 to 25% for the recently completed quarter; Windows 2000 should spur them even higher

- beyond the box revenues are growing at rates over 40%/year

- relationship with AOL was announced today where DELL will pre-install AOL software on some of its boxes

Niles commented that it is important to note that DELL provides more servers to dotcom companies than even SUNW.

Investment gains are above Wall Street expectations and growing revenues by over 30%. Profits were squeezed because (1) INTC could not supply enough products to DELL and (2) big corporations did not want to buy pc's at the end of the year, with y2k concerns. Both these issues are in the past and margins are starting to look better.

Niles says that DELL will be at $50 by latter part of this year and it is time to buy the stock.

As to the spate of attacks on web sites, Niles believes that in general it is a concern. People have to feel secure if they are going to do transactions over the net. However, security is getting better and it should improve going forward. In any event, it is not a new problem, just more prominent.

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To: jbn3 who wrote (319)9/28/2000 11:28:09 PM
From: Sonki
   of 335
Dell Reduces Server Prices by Up to 47 Percent

ROUND ROCK, Texas, Sep 27, 2000 (BUSINESS WIRE) -- Dell(tm)
(Nasdaq:DELL) today
announced that it has completed U.S. price reductions of 14 percent to
percent across its entire line of award-winning PowerEdge(tm) servers,
continuing to set the industry benchmark for combined price,
performance and
value, and increasing the pressure on its competitors in the server

Customers can now purchase a PowerEdge server from Dell, the world's
direct computer systems company and the world's second-largest provider
in the
Intel architecture-based server market(a), for as little as $1,182.

Dell's most dramatic price reduction appears in the enterprise-level
segment with fully configured, four-processor PowerEdge 6400 and
PowerEdge 6450
servers receiving price reductions of 47 percent and 43 percent
respectively. At
the high-end, customers can now purchase robust PowerEdge 8450
servers for as little as $13,955.

"Dell's direct model and incredibly efficient supply chain, which
inventory in minutes, not weeks, days or even hours, enables us to very
pass component savings along to our customers," said Kevin Soelberg,
Dell vice
president for public sector and Americas enterprise marketing.

"Our customers understand that they don't need to overpay for
performance, the latest, most relevant technology, and superior levels
customer service. Dell has a long history of delivering it all at a

Sample Minimum PowerEdge Server Configurations and Prices
Model Configuration Before After % Decrease
PowerEdge 1300 Pentium(R)III 700 MHz $1,817 $1,182 35 %
/ 64 MB memory / 9 GB
hard-drive / three-year
next business day service
PowerEdge 2400 Pentium III 733 MHz $2,869 $2,069 28 %
with 256 K cache / 128 MB
memory / 9 GB hard-drive /
4 bay backplane /
three-year next business
day service contract
PowerEdge 2450 Pentium III 733 MHz with $3,624 $2,675 26 %
256 K cache / 128 MB
memory 9 GB hard-drive /
three-year next business
day service contract
PowerEdge 4400 Pentium III Xeon(tm) 800 $4,718 $3,818 19 %
MHz with 256 K cache / 128
MB memory / 9 GB hard-drive
/ Intel(R)Pro 100 NIC / 8
bay backplane / three-year
next business day service
PowerEdge 6400 Pentium III Xeon 550 MHz $7,798 $6,398 18 %
with 512 K
cache / 256 MB memory / 9
GB SCSI hard-drive / Intel
Pro 100 NIC card / 8 bay
backplane / three-year next
business day service
PowerEdge 6450 Pentium III Xeon 550 MHz $7,921 $6,821 14 %
with 512 K cache / 256 MB
memory / 9 GB hard-drive /
Intel Pro 100 NIC card
/ rack rails / three-year
next business day service
PowerEdge 8450 Pentium III Xeon 700 MHz $20,006 $13,955 30 %
with 1 MB cache / 256 MB
memory / 9 GB hard-drive /
Intel Pro 100 NIC with
adaptive load balancing /
rack rails / three-year
next business day service

PowerEdge Server Configurations with Price Reductions
of 43 percent and 47 percent
Model Configuration Before After % Decrease
PowerEdge 6400 4 Pentium(R)III 700 MHz / $29,195 $15,341 47 %
1 GB memory / 18 GB
hard-drive / 128 K RAID
controller / Intel Pro 100
NIC / 6 bay backplane /
three-year next business
day service contract
PowerEdge 6450 4 Pentium III 700 MHz $31,446 $18,042 43 %
with 1 MB cache / 2 GB
memory / 18 GB hard-drive /
128 K RAID controller /
Intel Pro 100 NIC / rack
rails / three-year next
business day service

Dell PowerEdge Servers

Dell PowerEdge servers power the infrastructures of a range of
customers, from large corporate accounts to small businesses and
institutions. The servers have won numerous awards for their
reliability and ease to service, and overall value from leading
industry trade
publications like InternetWeek, Network Computing and Network Magazine.
PowerEdge servers range from single-processor workgroup systems to
eight-processor enterprise systems. Dell also offers a complete line of
appliances with its PowerApp(tm) line and storage systems with its
PowerVault(tm) line. For more information about Dell server and storage
products, go to

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To: Sonki who wrote (327)10/7/2000 12:40:05 PM
From: jbn3
   of 335
Is DELL sole provider under EDS Navy contract?

Friday October 06 07:16 PM EDT
Navy awards huge outsourcing contract to EDS
By Paula Musich, eWEEK

After several false starts, the U.S. Navy late this afternoon finally awarded its much-vaunted $6.9 billion outsourcing contract to Electronic Data Systems Corp. (NYSE:EDS - news) to pull together all of its desktops, systems and networks across different Naval and Marine Corps commands.

The contract, the largest of its kind according to Navy officials, calls for EDS, of Plano, Texas, to create a single intranet that will facilitate data sharing across the two military units. It will tie in approximately 350,000 desktops and link some 200 separate networks into the intranet.

• Navy postpones huge computer contract award
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The Navy/Marine Corps Intranet is intended to accomplish several goals, according to Secretary of the Navy Richard Danzig. They include achieving a cost savings of about $1.2 billion a year through economies of scale; improving security; keeping information technology in the Navy and Marine Corps on a par with the private sector; and improving reliability.

"We knew that by turning it over to a private contractor, we could refresh the technology readily and free up civil servants and sailors and let them do what they need to do," Danzig said.

At the same time, the Navy can change the culture of the organization by creating a common information system.

"So instead of different participants maintaining their own information supply and sending e-mails to request something from someone else -- instead of the culture of 'mother-may-I?' -- individuals can respond according to their own sense of priorities," Danzig said.

The five-year contract also has three-year renewal options that can bring the value up to $9 billion. The Navy also kept the option of calling on a runner-up to step in if EDS fails to meet its objectives, and that runner-up can be called on to monitor the effectiveness of EDS.

The Navy expects about 40,000 desktops will be linked in the first year, focusing initially on the Naval Air Systems Command, which had contracts up for renewal.

Several delays

Although the Navy had expected to award the contract sooner, the date was postponed several times. Secretary Danzig attributed the delays to a reticence to move forward without Congressional approval.

"We needed to make sure we had genuine Congressional support," he said. "We didn't want to announce this until the authorization committee spoke in support of it."

Other reports suggested there were concerns about the loss of jobs in certain districts. In working with Congress, the Navy agreed "not to introduce ship maintenance activities until a year from now, and Congress asked that we not integrate the air depots for a year. We agreed to that," said Danzig.

EDS will work with several subcontractors, including Raytheon, MCI WorldCom, Cisco Systems Inc. (Nasdaq:CSCO - news), WAM!NET, Dell Computer Corp. (Nasdaq:DELL - news) and Microsoft Corp. (Nasdaq:MSFT - news) EDS will also subcontract 40 percent of the total award to smaller businesses.

Other bidders for the contract included Computer Sciences Corp. (NYSE:CSC - news), General Dynamics Corp. (NYSE:GD - news) and IBM.

The Navy/Marine Corps Intranet will cover the continental U.S., Hawaii, Alaska, Puerto Rico, Iceland and Guantanamo Bay, Cuba.


Note that DELL is the only PC manufacturer listed

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To: jbn3 who wrote (328)4/6/2005 11:59:56 PM
From: Sr K
   of 335
What's a fair PE ratio for a company that grows revenue by 13% per annum? What if it spends 200% of its earnings to buy back shares? What's a reasonable goal for ROI on the cash used for buybacks for a company buying back its shares?

I don't understand how growing from $49B to $80B over 4 years is consistent with a growth path. Yet the stock popped $.49 AH.

There are 30 bookmarks here. Let's see if anyone responds.

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From: Ms. Baby Boomer3/9/2006 8:03:43 AM
   of 335

That particular model no longer exists @ this location as recently attended Annual Las Vegas Chambers Party....


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To: Mick Mørmøny who wrote (325)9/8/2006 7:32:04 PM
From: ptlusa
   of 335
They are still the gold standard, a true American firm. Way better than pot-smoking Apple

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From: Sr K11/21/2006 5:23:08 PM
   of 335
Dell beats estimates by 6 cents, up $2.10 or 8% AH.

But in Outlook, they state:

<<In addition, the fourth quarter of fiscal year 2006 included one extra week.>>

but last year in the February CC Q&A they answered that the 14th week did not contribute to that Q4 performance, because companies budget quarterly.

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From: Sr K8/30/2007 4:39:25 PM
   of 335
Let's wake up this board.

Dell reports:

"Net income for its fiscal second quarter that ended Aug. 3 was $733 million, or 32 cents a share. Operating income of $896 million included $102 million, or 3 cents a share, in expenses related to payments for expired in-the-money stock options ..."

They couldn't have sold calls, could they? They used to sell puts and buy calls.

So if the <<expenses related to payments for expired in-the-money stock options >>

were $30 puts expiring 7/31/2007 or so, why don't they just state that they're puts and what the expiration date was?

They will probably put it in the 10-Q.

And did they roll them over?

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From: Sr K6/12/2010 2:34:37 PM
   of 335

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