Thursday, May 28, 2009

Dell earnings and conference call

AlphaNinja - Dell (DELL) beat by a penny on light revenue this afternoon, and the street wasn't expecting much out of this quarter.

The BAD:

-Unit sales down 17% and total sales down 23% year over year.

-Operating Income down 54% from last year's Q1

-Earnings per share down 61%

-The company's macro outlook is not improved from February


-With revenue and average selling price down so much, gross margin held up well, down just .8%

-Dell sees the potential for a powerful upgrade cycle, as many companies have completely skipped the Vista platform, and the installed base is getting very old.

Dell has over $10billion in cash and ST securities - 2010 (ending Jan2011)FreeCashFlow could equal 17% or higher of the company's "net of cash" purchase price. The stock is a big-time BUY, and could be a double within the next year.

(Disclosure - long DELL)

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