It seems likely to me one of the drags on the stock price is another delay in Windows 2000. The street never likes these delays,we should get some clarification during the conference call tonight. JMO.
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Microsoft faces delay questions
Wall Street worries about Windows 2000 release
By Mike Tarsala, CBS MarketWatch
Last Update: 2:00 PM ET Oct 19, 1999 NewsWatch
REDMOND, Wash. (CBS.MW) -- Microsoft Corp. will report its earnings Tuesday afternoon amid questions about the possibility of another stall in the release of one of its key products -- the Windows 2000 operating system.
Analysts first predicted customers would be able to buy Microsoft's (MSFT: news, msgs) Windows 2000 server-computer operating system -- then called Windows 4.0 -- in early 1999. The company never gave a firm date stating when the highly anticipated product, four years in the making, would come out. However, market watchers pushed back their expectations, anticipating a mid-1999 debut.
That period came and went, and Microsoft executives said Windows 2000 could be purchased by the end of this year. And yet, recent reports in trade publications suggest that the world's largest software maker may delay Windows 2000 until February 2000.
Delays of the product already have hurt Microsoft's credibility with customers, says Mark Specker, an analyst with Sound View Financial Group. As they reassess their view of the company, investors and analysts will want to know that the software for running powerful computers soon will be in customers hands.
"It's likely that some commercial availability will still happen this calendar year," Specker said. "It's not a huge issue, but there's some expectation of revenue (from Windows 2000) in the fourth quarter."
Despite the delays, it's to Microsoft's credit that the company isn't rushing one of its most important products to market, Specker adds
Of course, investors have perhaps more important expectations for Microsoft on Tuesday -- namely earnings. The company is expected to come in with per-share earnings of 34 cents for its first fiscal quarter, according to First Call.
In its most recently reported quarter, ended in June, Microsoft earned 40 cents per share, up from 25 cents per share in the June 1998 quarter. Revenue in June increased 39 percent to $5.76 billion from $4.15 billion in the year-ago period.
The company on Tuesday likely will give an update on sales of its profitable Office 2000 software. In a conference call shortly after the market close, analysts likely will ask about the possibility of any stalls in Office 2000 sales in the company's December quarter due to Year 2000 computer glitch concerns, Specker says. Analysts also will ask if Office 2000 sales will be affected by timing of the Windows 2000 debut, he says.
Microsoft executives also are expected to give details on what's been a busy quarter. In the period ending Sept. 30, the company defined its new Internet strategy with its DNA 2000 announcement see full story. It also opened a new 32-acre Silicon Valley campus. Microsoft announced it would spin out its Expedia travel service. The company entered a joint venture with Ford Motor Co. to sell cars over the Internet see full story. And Microsoft rallied corporate support to push for the use of broadband Internet access see full story.
In addition, both Microsoft and the Justice Department presented closing arguments in their lengthy antitrust trial see full story. |
