One short quarter after a chink was revealed in Dell's (DELL) - Get Report armor, investors seem satisfied that it will post earnings in line with slightly reduced estimates.

After Dell's fourth-quarter revenue number

disappointed a fickle group of analysts in February, the company's stock fell 17% in after-market trading and investors assumed the days of 50% year-over-year growth were over.

But thanks in part to

Compaq's

(CPQ)

first-quarter collapse, expectations for Dell's future are once again as bright and shiny as one of the company's alabaster workstations. Even former Dell skeptic Ashok Kumar of

U.S. Bancorp Piper Jaffray

is optimistic -- at least for this quarter. "The April quarter is in the bag," he says. Piper Jaffray has no underwriting relationship with Dell.

After Tuesday's market close, Dell is slated to report its earnings for its first quarter ended May 2. Analysts

estimate the company will earn 16 cents a share, up from a profit of 11 cents in the same quarter last year and on par with its fourth-quarter profit. (Dell completed a 2-for-1 stock split on March 5.)

Investors will again monitor revenue closely. Last quarter, the Round Rock, Texas-based direct seller of PCs recorded a 38% year-over-year increase in revenue, a rate many regarded as disappointing. In its first quarter last year, revenue grew 51% from the year before. This quarter, a 40% to 42% rate should satisfy the Street, say analysts, which would translate to between $5.5 and $5.6 billion.

As if Kumar were a pied piper, others are hearing his first-quarter call. "I'm going to take the lead of the guy who has been right for the last three quarters, Ashok, and be positive about Dell," says Philip Treick, portfolio manager of

(TPAGX)

Transamerica Premier Aggressive Growth, who has more than 8% of his portfolio in Dell stock.

Kumar, who has a buy rating on the stock, predicted last November that Dell's sequential revenue growth would decline but then wrote in March that "the magic is back" in Dell's stock.

Shares of Dell began 1999 on fire, chalking up a 48% stock gain in January alone. But they got a little ahead of themselves by early February, says Lou Mazzucchelli, a PC analyst at

Gerard Klauer Mattison

, and paid for it. Unlike in previous quarters, when Dell's stock shot up before each earnings announcement, investors are taking a wait-and-see approach this time. Dell was up only marginally last week. "The company should beat the number, but I don't think they want to blow it out," says Mazzucchelli, whose firm has done no Dell underwriting.

A blowout quarter would push expectations back up to where they were when Dell could do no wrong, says Mazzucchelli, who has a buy rating on the stock. Dell's management likely wants to prove to investors that the company's relatively weak fourth quarter was an aberration. Dell's

bullish talk last month at its semiannual analyst meeting indicated a desire to re-establish itself as an industry leader.

Dell should continue to take share from Compaq, especially since resellers will wait to see what the intentions of the company's new management are, says

BT Alex. Brown

analyst Philip Rueppel, who upgraded Dell to a buy from a market perform last week.

"We believe Dell's conference call Tuesday could serve as a catalyst for a revision to our financial forecast," wrote Rueppel, who predicts Dell will earn 76 cents a share this year. The analyst consensus estimate for this fiscal year is 73 cents. BT Alex. Brown hasn't done any recent Dell underwriting.

While there is little argument that Dell is still the best in the PC business, some believe the company's stock is too pricey. "I'm just not comfortable with Dell's valuation right now," says an institutional money manager who requested anonymity. The manager has scaled his Dell position down recently, loading up on Compaq instead.

"That's only because my money tends to be in stocks that everyone else hates," says the manager, who notes that these moves were made simply because he runs a "value shop."

As for the second quarter, Kumar argues that Dell's earnings could be hurt by lower revenue thanks to a governmental slowdown in PC spending. But that may be too far in the future for Dell's fickle fans to worry about.

H-P Earnings Also Due

Hewlett-Packard

(HWP)

reports its second-quarter earnings Monday after the close. The ability of the PC and peripherals company to execute lies between Compaq's poor skills and

IBM's

(IBM) - Get Report

steady hand -- a rather wide gap. Wall Street can't decide where H-P's stock is headed next. CEO Lew Platt is stepping down next year, and the company is actively seeking a new candidate.

The

First Call

consensus

estimate looks for a profit of 80 cents a share in H-P's fiscal second quarter, compared with 65 cents in same quarter last year, when H-P missed the analyst consensus by 4 cents. Since H-P fell short of its second-quarter estimates last year, analysts expect the company to easily hit its target this time.

Merrill Lynch

analyst Steve Milunovich last week bumped up his H-P earnings estimate to 83 cents a share from 79 cents, saying "we expect revenue growth to accelerate to 8% to 10%" in the company's second half. H-P had revenue growth of only 1% in its first quarter this fiscal year, which ends in October 1999. Milunovich has an accumulate rating on H-P, and his firm hasn't done any recent underwriting for the company.