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Thursday, November 20, 2008

Dell 3Q:2009 results

Revenues significantly worse than expected at 15.2 billion offset by higher gross margins and tight expense controls, leading to 6 cents of upside for the quarter. Component prices clearly are coming down very rapidly or there's something funky in there distorting the number. It's surprising (suspicious?) that they have that kind of dynamic control of the P&L. I took off the small short basically flat from the sale because I'm scratching my head on how they made all that money on that kind of top line shortfall. No guidance except corporate will remain challenging.

Maybe I'll get to short it at $11.75 after all.

Also surprising in the release is the comment that they bought back 21 million shares for 400 million dollars in the quarter. I guess they've never heard of VWOP -- their average price close to $20 with the stock at $10.

More after the call.

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