Dell 1Q:2009 Results

Despite domestic headwinds, Dell managed to beat revenues by 300mm and put up a better EPS number, even after backing out the numerous non-operational gains. International growth was the main driver. Notebooks grew at a blistering 46% y/y in units and mid 20% in dollars against a soft comparable period last year. Currency was the main source of the revenue upside, though, and that's a transitory source of upside -- they don't control it, its random as far as business is concerned unless they're going to go back to trading currency futures like they used to.

I'm a seller of currency beats in general.

Marvell (MRVL) guides better

Revenues of 830-850mm, non-gaap gross margins of ~51%, better than consensus of 813mm and 49.4% respectively. Obviously EPS going higher. I'm offering my whole position at 16.6. Might regret it. Hope I have lots of times that I regret booking a 45% profit.

5:27pm: I'm out. Yay!

Dell surprisingly strong

I'm on the Marvell call but have to acknowledge I'm surprised. So. I'm surprised. I'll listen to the call later.

Marvell (MRVL) chart

Could make a case for making sales at 15.60 or 16.60. Pick your poison.

5:22pm: Showing the whole chart -- I was asked where the line came from. Doing this also revealed a downtrend line worth noting b/c it pinpoints the 16.6 level.

Marvell (MRVL) better

They beat revenue estimates by roughly 20mm. Non-gaap gross margins were substantially better at 52% versus last quarter at 48.7% and consensus of 49%. This led to major upside on the bottom line. There's a 24 mil gain against operating expenses but despite that, operating income is over 30% better than projections. No guidance yet. I'm offering a chunk at 16.6 where the chart says I need to make a sale.

Earnings tonight: DELL, MRVL, OVTI, SIGM

Ahh it feels like earnings season... but its not.

Dell ought to be showing some signs of economic strain. I'm not involved.

Marvell (MRVL), a stock I had suggested buying after their last quarter, has had a great move from $10.70 to $14 last. Though the hard drive market has lost some of its lustre, units have remained pretty strong. I'm going to stick to my price target area of $15-16 despite the earnings risk tonight.

Omnivision (OVTI) is not a great company. They're mostly low end camera sensors. I think they've managed to hold share well and probably did okay despite their bottom heavy mix. I have no position and don't recommend one.

Sigma Designs (SIGM) is probably weak again. Bluray is seeing very slow adoption rates. Motorola is probably not going to suddenly ratchet their build plan higher so I would expect numbers to erode further. I wouldn't want to be long into the number but I may want to be afterward.

Back to the trough in Texas Instruments

I just sold some short 32.95... I really don't think wireless has improved much for them despite the stock price rise.

I'm also looking to put NSM out but it has a bit more room. Will do the chart in a little bit.

Barrons ran an article on chip stock potential takeouts in analog. They said Maxim, Linear, Intersil and National Semiconductor are companies Texan might want to buy. I do think Texan has to buy someone. I hope I don't get caught short their choice.

Infineon preannounces - implications

UBS is saying the lowered guidance is due to a lower build plan for iPhone 3G -- that the plan was cut 1.5mm units and it caused a shortfall in HSPDA. I think Apple cutbacks are somewhat factored into suppliers minds as Apple has a history of setting the supplier bar high so they don't get caught short. For example, Apple had signed multiple guaranteed supply agreements in NAND to make sure they didn't run out. I think Nokia is more likely the culprit of the incremental weakness as all this talk of nifty new 3G handsets from RIMM and AAPL could slow consumer purchasing decisions on big ticket smartphones until the iPhone arrives.

Rackable (RACK) weaker on Amazon share loss rumors

Rackable has had a great run from $8 to $13. They missed revenues by a lot last quarter but the stock has remained strong because gross margins improved some 600 bps q/q. There's a story floating around that they're losing share at Amazon, historically a very important customer representing 24% of sales last quarter. Facebook is growing nicely -- they clocked in at 17% of last quarter. Facebook recently raised 100mm to spend almost exclusively on servers.

I think RACK is somewhat vulnerable here at $12.70, though I'd look to re-enter it on material weakness.

Earnings Estimate Cheat Sheet – May 27, May 28, May 29, May 30, 2008

Estimated Reporting Date	Symbol	Revenue Estimate Current Q	Operating Profit Estimate Current Q	EPS Estimate Current Q	EBITDA Estimate Current Q	Revenue Estimate Next Q	Sequential Revenue Growth Estimate, Percent	Operating Profit Estimate Next Q	EPS Estimate Next Q	EBITDA Estimate Next Q	Revenue Estimate Full Year	Operating Profit Estimate Full Year	EPS Estimate Full Year	EBITDA Estimate Full Year	Revenue Estimate Next Year	Operating Profit Estimate Next Year	EPS Estimate Next Year	EBITDA Estimate Next Year
5/27/2008	SNDA	106.9	43.0	0.51	49.5	110.2	3.17%	43.4	0.51	50.3	456.0	178.4	2.04	212.9	542.0	209.0	2.34	245.8
5/28/2008	TIVO	55.6	(2.6)	(0.01)	2.1	56.7	1.99%	(3.1)	(0.03)	0.4	232.6	(21.1)	(0.16)	(3.4)	253.6	(5.4)	(0.02)	7.6
5/29/2008	DELL	15,658.5	805.1	0.33	963.5	15,592.6	-0.42%	816.2	0.34	927.5	64,590.7	3,620.3	1.50	4,305.3	68,365.9	4,130.2	1.76	4,840.7
5/29/2008	MRVL	783.6	91.6	0.13	89.8	813.5	3.83%	111.4	0.15	111.4	3,382.8	503.1	0.70	500.5	3,869.4	691.3	0.96	704.2
5/29/2008	NVLS	251.1	3.7	0.04	22.8	257.9	2.71%	12.5	0.08	31.6	1,121.3	68.6	0.46	136.2	1,265.5	150.5	1.17	213.8
5/29/2008	OVTI	177.6	18.3	0.32	21.9	192.8	8.56%	20.2	0.36	22.8	808.3	95.9	1.73	107.4	841.0	88.7	1.60	116.8
5/29/2008	SCMR	46.5	3.0	0.03	0.0	41.9	-10.00%	(0.1)	0.03	0.0	158.7	(16.9)	0.13	2.2	173.6	1.1	0.16	6.7
5/29/2008	SEAC	43.6	(0.9)	(0.01)	2.2	47.3	8.60%	0.5	0.02	3.6	195.2	4.2	0.16	18.0	212.9	6.0	0.23	18.7
5/29/2008	SIGM	60.1	16.1	0.42	16.2	69.1	14.99%	19.8	0.50	19.4	302.8	89.9	2.23	90.0	389.7	117.6	2.80	121.9
5/29/2008	WIND	80.9	0.6	0.02	4.2	89.0	9.95%	8.2	0.10	9.1	368.6	37.9	0.44	41.0	409.9	50.7	0.55	62.9