Dell (NASDAQ: DELL), whose tech colleagues include Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC) and Hewlett-Packard (NYSE: HPQ), had a pretty decent third quarter. The bottom line came in at $0.37 per diluted share. That represented a growth rate of 9%, and it handily beat analyst expectations of $0.31 per share according to Thomson Reuters. I give Dell credit for the significant beat.

However, it should be noted that the bottom line was driven in part by share repurchases. There's nothing necessarily wrong with that, but it does put the big earnings beat in perspective. Indeed, on a dollar basis, profits decreased about 6%. Still, operating income rose 22% on a year-over-year basis.

But then there's the statement of cash flows. Cash was used for operations in the third quarter, a reported $86 million. Last year at this time, Dell generated $998 million from operating activities. That's something to at least think about. In fact, the press release said that slowing demand helped to worsen the cash conversion cycle. Now, I won't crucify Dell on this one cash-flow statement, because the company should still deliver a lot of the green stuff on an annual basis. But even the nine-month statement shows a decline in cash from operations. Again, it's something an investor must consider, and it puts that earnings beat in perspective.

Microsoft (NASDAQ: MSFT) had, if you'll pardon the pun, a soft first quarter. The data just didn't do anything for me. The software giant, which competes with Apple (NASDAQ: AAPL), Yahoo! (NASDAQ: YHOO), Google (NASDAQ: GOOG) and IBM (NYSE: IBM), reported after the close of the regular session on Thursday. The stock was down slightly in the after-hours session, which seemed reasonable enough to me.

It's not as if some huge miss was reported. It's just that the growth rates weren't the stuff of shareholder dreams. Revenues increased 9% to about $15 billion. Earnings per diluted share came in at $0.48, and that was one penny better than what Wall Street was looking for. But it was only three pennies better than the previous year's Q1 results. So, it's not like things are shooting up like a rocket for Mr. Softy.

In addition, a look at the statement of cash flows shows a decline in net cash generated from operations. That figure decreased 43% to $3.4 billion. Plus, management is being cautious in its outlook and has issued Q2 guidance for earnings that was below what Wall Street was hoping for. Microsoft says it will probably do between $0.51 and $0.53 per share; Wall Street wanted $0.55 per share. Oh well, can't please everyone. Especially not in this time period.

Tech giant Apple Inc. (NASDAQ: AAPL) put up some impressive numbers for its fiscal fourth quarter this afternoon as the company saw huge shipments of its iPhone and Macintosh products (wsj subscription required), but did forecast that its first quarter was going to be challenging.

Going into this afternoon's earnings announcement, analysts had been expecting the company to earn $1.11 a share, but the company shattered that estimate with a reported $1.26 per share, accompanied with a revenue jump of 27% to $7.9 billion.

Most of the attention that Apple has received over the past six months has surrounded its upgraded iPhone, the iPhone 3G. During the quarter, iPhone shipments shot through the roof, rising six times to 6.9 million units.

In a press release issued this morning, Dell (NASDAQ: DELL) warned investors that it is "seeing further softening in global end-user demand in the current quarter."

More optimistically, the company noted that "grew unit shipments faster than the industry in the first half of calendar 2008 and expects to grow faster than the industry for the full year."

That's bad for competitors with weaker brands such as Hewlett-Packard (NYSE: HPQ). Dell is struggling to meet its growth targets in the face of weakening demand, even as it gains market share. How badly are the companies that are doing average relative to their peers doing?

Dell's press release is more of a commentary on the market than the company itself although, in pre-market trading, it helped send Dell shares down nearly 7%.

"The decline in the price of Intel (NASDAQ: INTC) is disconcerting, but on balance, not a surprise," says tech guru Paul McWilliams.

Here, in his Next Inning newsletter, the advisor reassesses his forecast for Intel and the tech sector made at the start of the year, and his continued optimism for the stock's future performance.

"In January, I initially concluded that mature global economies were likely going to exhibit slow growth in 2008 and may dip through a recession.

"However, I also had forecast that emerging economies were large enough to where their contributions, even though they would also probably see some slowing in 2008, would keep aggregate growth high enough to avoid any serious worldwide macroeconomic pain.

"My conclusion was that while it is normal to expect spending by governments, businesses, and consumers to follow GDP patterns, there are what I saw then and still see now as good reasons to believe there would be a preference given for tech.

"In other words, my belief was then and still is today that spending on certain tech sectors would hold stronger than normal in the face of aggregate GDP slowing.

Dell (NASDAQ: DELL ), whose competitors include Apple (NASDAQ: AAPL), Hewlett-Packard (NYSE: HPQ), Intel (NASDAQ: INTC) and Microsoft (NASDAQ: MSFT), reported results for the second quarter on Thursday after the market closed. Like many others, I wasn't expecting the bottom-line results to miss estimates. But it did.

The top line was okay. Net sales increased 11% to $16.4 billion, beating estimates that called for growth of around 8%. But earnings per diluted share were not okay. They came in at 31 cents, a 6% decrease in terms of year-over-year comparisons. Wall Street was looking for 36 cents per diluted share. Costs went up at a greater rate than sales growth, driving the gross margin down. As can be seen, Dell needs to better manage its cost structure so that it may protect its margins. It's a shame that the company couldn't have grown the bottom line considering the nice revenue gain.

Not only was the profit drop disillusioning, but the operational cash flow was likewise disappointing. It dropped 40% during the quarter, and it decreased 29% over the least six months. Dell watches its cash flow carefully, and it would like the money generated from operations to exceed the net-earnings figure. So far, the company has fallen short in this regard. However, according to the transcript, Dell's CFO, Brian T. Gladden, believes that operational cash flow will exceed net earnings. Shareholders obviously hope that he'll be ultimately proven correct on this prediction.

Dell (NASDAQ: DELL), a PC maker whose rivals include Apple (NASDAQ: AAPL) and Hewlett-Packard (NYSE: HPQ), is due to report second-quarter numbers on Thursday, August 28, after the market close. It's going to be interesting to see what the company says about demand levels for its PCs. We're still working our way through a tough economic period, so in some respects, this will be a sign of how the consumer is faring.

Of course, Dell has been trying to stage a comeback lately even without regard to the economy. As with any once-hot growth stock, there comes a time when the capital appreciation starts to slow and gains are digested. Dell's shares have cooled over the last several years. Dell's stock has decreased over 21% over the five-year timeframe, and 29% over the last three years.

Lately, though, the stock has been stronger and, appreciating over 20% in the past six months, and nearly 7% in the past month alone.

Dell is expected to report a double-digit increase in the bottom line this Thursday. The call is for 36 cents per share, according to Earnings.com. Last year at this time, Dell posted earnings of 32 cents per share. Looking at the history of Q2 results, I'd say it's a decent bet that the company meets expectations. If management were to blow the estimates out of the water, it would be impressive, but my gut says that won't happen. According to Trey Thoelcke, top-line revenues should expand by roughly 8%.

Readers of this space know that my investment bias is toward large-cap companies with demonstrated business models and which have a competitive advantage in established markets, preferably with a favorable global trend as a support. In general, turnaround and business model change plays are avoided, but there are exceptions to the rule, and one is Corning.

Corning Inc. (NYSE: GLW), once a reliable but slow-growth kitchenware and cookware company, today represents one of the signature corporate transformation stories of the digital age.

Corning is one of the leading providers of fiber-optic cable, which the company invented more than 30 years ago. Further, its substrates business did not draw Wall Street's attention until technological advances enabled the price-competitive production of flat panel displays in flat panel televisions, desktop monitors and notebook computers.

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and a competitive advantage in established markets, preferably with a favorable global trend as a support. With this in mind, Intel is worth an evaluation.

Intel (NASDAQ: INTC) is the world's largest semiconductor maker, as measured by revenue and unit shipments, and is the dominant microprocessor manufacturer for personal computers.

In general, analysts expect F2008 revenue to increase 5-7%, after an 8% increase in F2007. The conventional wisdom in semiconductor analysis land now suggests that smaller/more-portable computer forms and media-rich PDAs will drive strong PC and PDA microprocessor sales.

Further, Intel remains the leader in next-generation chip technology, and its product mix remains superior. Gross margins should increase, as a result of lower unit costs and improved plant utilization. Also, high-performance chip prices should increase noticeably.

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Western Digital Corp.

Western Digital Corp. (NYSE: WDC) is one of largest, independent hard drive manufacturers in the world.

In general, analysts see 35%-45% revenue growth in FY 2008, reflecting the Komag acquisition, and solid PC hard drive and DVD hard drive demand.

Dell (NASDAQ: DELL) wants to sell PCs at retail outlets, but it does not want to take away some of the customers who buy its products on the internet. And the company can't have it both ways.

According to The Wall Street Journal, "As Dell broadens from just selling its wares directly over the internet and by phone, it risks siphoning off its web customers, who represent the majority of its consumer sales."

Taking such a gradual approach may hurt the company. Most of Dell's competitors, including HP (NYSE: HPQ) and Lenovo, offer a very broad set of products through most consumer electronics retailers. Even Apple (NASDAQ: AAPL) now sells though some large stores.

Since Dell is losing market share to most of the other large PC manufacturers, its philosophy of holding back some of its product line is puzzling. HP is now the leading vendor of computers in the U.S., and recent research shows that Apple is picking up substantial market share.

Trying to decide which products will be offered to consumers at retail and which will be seen only on Dell's website seems to be a complex formula that may only result in lower sales.

The consumer wants what he wants when he wants it. Making it harder for him to buy is a bad idea.

Douglas A. McIntyre is an editor at 247wallst.com.

Lenovo, the Chinese PC company, is known for producing good laptops for businesses. But with Mac sales moving up sharply, going after Apple (NASDAQ: AAPL) seems too hard to resist.

According to The Wall Street Journal, "As with many of its competitors, Lenovo is emphasizing design and style, and trying to turn notebooks into fashion accessories that reflect individual personality." Dell (NASDAQ: DELL) and HP (NYSE: HPQ) are also coming out with fancy, feature-full PCs.

The problem, of course, is that the field for Mac-like computers will become crowded very quickly. That leads to the question of whether the PCs will be able to get some market share from the Mac or actually just compete with one another.

The success of the new computers will depend on several things. One is whether consumers are willing to use Microsoft (NASDAQ: MSFT) Vista over the Apple OS, which has gotten very good reviews. Another is whether the new PCs can match most of the attractive design features of the Mac.

But the most important factor may be price. If PC manufacturers can bring most of the Mac's features to market for several hundred dollars less per machine, then they have a chance.

Douglas A. McIntyre is an editor at 247wallst.com.

My in-laws have been using Apple (NASDAQ: AAPL) computers forever. I have been using Microsoft (NASDAQ: MSFT) Windows-based machines, because most of our software and that of our engineering consultants was not supported on Macs. This extended to our home/studio. Well, a few years ago my daughter (remember, the iPhone enthusiast?) got an Apple notebook, then my wife did, then six months ago my 11 year old got one. iMacs are taking over the house.

Apple has made a lot of strides in the past 18 months to make all this switching much more easy. From using Intel processors, to adopting Windows options, to improving the operating system and already having the historically superior machine in terms of stability, anti-virus environment, better graphics and sound integration and more innovation on all levels.

So what does the Microsoft-based Windows PC offer me? As far as I can figure out, there are two advantages. The first is price: Apple charges extra for the cool factor, as it does with everything it produces. Although you have to give Apple credit for innovation and its R&D efforts, that has a cost. Microsoft is not known for innovation. The second thing a Windows PC offers is the greater number of programs available. The second attribute is bound to change as more and more people buy Macs and software companies and developers look to grow with that end of the market.

Continuing with our defensive stock series for a choppy/consolidating market: generally, one would not list a tech stock as a defensive play. Cisco Systems (NYSE: CSCO) is an exception.

Two fundamentals warrant the advocacy of Cisco as a defensive play: 1) the company supplies the majority of networking equipment used for the internet -- it is the world's largest supplier of computer internetworking systems, and 2) emerging market growth. So long as the internet remains intrinsic to business processes in emerging/developed markets and so long as emerging markets continue to grow, Cisco will benefit in the years ahead. Analysts project a roughly 15%-20% annual revenue growth rate for CSCO for 2007-2009. Another positive: look for CSCO's advanced technologies unit to continue to contribute impressively to the company's revenue on video system business.

Further, we'll skip for this review the debate regarding the possible "broadband shortage" and focus instead on the counterargument. Assume deteriorating conditions in the U.S., perpetually high energy prices slowing global growth, and increased protectionist sentiment. The impact on Cisco? Most likely, CSCO keeps growing, albeit at a slower rate, but it will grow, nonetheless. CSCO's shares closed Wednesday down 28 cents to $31.26.

[Note: Technical analysis agnostics stop reading here; all others continue.]

Technically, Cisco's chart is strong. True, the stock has recently retreated from a 52-week high of around $33.60, but this came after an impressive advance from the $26-range. Cisco has dipped below its 50-day moving average for the second time in four months, but it's been above its 200-day moving average for more than a year. The p/e of 27 is elevated, but this is not an unreasonable p/e, given CSCO' s likely strong revenue growth.

Stock Analysis: Cisco (CSCO) is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 1 year should be rewarded from CSCO's shares. Sell/Stop Loss: $22.

Chinese PC-maker Lenovo, which owns the former IBM (NYSE: IBM) PC operations, will open plants (subscription required) in India to supply that market and in Mexico to supply the US. Lenovo has the largest market share of the PC market in China but has put less emphasis on other emerging markets and North America.

That may be changing as the company takes on Dell (NASDAQ: DELL) and HP (NYSE: HPQ) in India and the US.

HP is less vulnerable. It has large printer, services, and server businesses and its global PC market share puts it in the No.1 spot.

Dell is less fortunate. Recent IDC and Gartner data show the company losing global share. Lenovo's CEO and supply chief are both former Dell executives.

Dell hardly needs the competition. In the midst of a turnaround now that founder Michael Dell has returned at CEO, the company has to bank on not having a sharp drop in revenue as customers move purchases to other PC-makers.

That turnaround just got a bit more difficult.

Douglas A. McIntyre is a partner at 24/7 Wall St.