AmTech Previews Dell (DELL) Q2 Earnings; Maintains Neutral

August 21, 2008 1:22 PM EDT

American Technology Research is out with a research note previewing Dell's (Nasdaq: DELL) Q2 earnings, which are expected out next Thursday, August 28, after the market close. Heading into the report, the firm maintains a Neutral rating on shares of Dell.

The firm believes Dell will report in-line or slightly better earnings than the Street's estimates of $0.36 in EPS and $15.9 billion in sales. AmTech notes that its supply chain checks have suggested that Dell's year-over-year unit growth could reach "the high-teens, if not better, against easy Y/Y comparisons." Contrarily, the firm said it is "picking up a lower-end mix from the build data and fairly heavy promotional activity, so we are not sure if it will translate into revenue and profits."

Notably, AmTech points out that Dell's earnings have been "somewhat unpredictable given its emerging channel-distribution business, its accounting treatment of reserves, and fairly aggressive use of one-time items."

Currently trading at 16x CY08 and 14x CY09 EPS, AmTech believes the risk/reward is not compelling.

Dell, Inc. and its subsidiaries engage in the design, development, manufacture, marketing, sale, and support of computer systems and services worldwide.

Related Categories

Analyst Comments

Stocks Mentioned

Related Entities

• American Technology Research

Comments

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?