Can Dell Continue PC Momentum With Earnings? (DELL, HPQ)

This week may be lightly attended by traders and investors, but Dell Inc. (NASDAQ: DELL) is set to report earnings on Thursday, August 28, 2008 after the close.  We’ll get to see if Hewlett-Packard (NYSE: HPQ) solid numbers are being seen at Dell during their turnaround as well.  First Call has estimates at $0.36 EPS on $15.94 Billion in revenues.  As far as what to expect ahead, the coming quarter is expected to be$$0.41 EPS and revenues are expected to be $16.7 Billion.  For FiscalJanuary 2009, estimates are $1.59 EPS on $65.86 Billion in revenues.  The other more important metrics to watch are below.

Despite a turbulent market and despite economic woes, Dell stock hasrisen nearly 20% in the last quarter.  Much of this data is subject tochange over the next 48 hours, but here are some data points to useahead for earnings:

• Analysts have an average price target that is north of $27.00
• Dell stock is currently hovering at highs not seen since late 2007, and shares are up about 35% from the lows around April
• Shares are well above the 50-day moving average of $23.88 (will changeby Thursday) and even much higher above the 200-day moving average of$22.14 (will change by Thursday)
• As of Tuesday, options traders are only braced for roughly a $1.00 to move (also likely to change by Thursday)
• Short interest is still high at 65 million shares as of July-end

Jon C. Ogg
August 26, 2008