Arno,
<MSFT might get whacked on Friday, due to failure to beat "whisper
numbers">
You may have to wallow those famous words of yours--but read on: :-)
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Wednesday April 16 6:58 PM EDT
Microsoft Corp seen posting sharp income rise
By Martin Wolk
SEATTLE, April 16 (Reuter) - Microsoft Corp is expected to show a sharp 40 percent jump in quarterly earnings Thursday on strength of the software giant's core business including the latest upgrade to its
best-selling Office suite.
On average analysts expect the Redmond, Wash.-based company to post earnings of $0.64 a share for its fiscal third quarter, compared with $0.44 a year ago after adjusting for a split, according to First Call.
Several analysts predicted revenues in the range of $2.9 billion, up about 32 percent from last year's $2.2 billion and up from $2.68 billion in the December quarter.
"I think on balance it will be a very good quarter," said David Readerman, analyst at Montgomery Securities. "I don't see any motivating factor why they should blow the number out."
In January, Microsoft launched Office 97, the latest version of its "productivity" applications such as word processing and spreadsheets that accounted for an estimated $2 billion of the company's $8.7 billion in fiscal 1996 revenues.
Microsoft makes the bulk of its money from "platforms" including the operating systems preloaded onto new personal computers, which generate about third of the company's revenues.
But analysts said the fastest-growing driver of revenue continues to be the high-end Windows NT operating system and related products for back-end computer servers.
Rick Sherlund of Goldman Sachs estimated that Microsoft's BackOffice business, including NT, would be up 100 percent over the year-earlier quarter and represent about 20 percent of total revenues.
Analysts expect results from the current fourth quarter to be similar to the third, but Microsoft has warned that growth is likely to slow in the fiscal year that begins July 1.
"I do expect them to reiterate that fiscal '98 will represent a period of slower growth for the company," Sherlund said.
While Microsoft is still benefiting from a mix shift to its more lucrative Windows 95 and Windows NT systems, analysts said it was not clear how planned updates to the products next year would affect revenues.
"They're being very cryptic on pricing," said analyst Scott McAdams of Ragen MacKenzie. He said Microsoft had delayed release of the products in part because corporate customers were becoming confused by the
proliferation of Windows flavors.
Nevertheless, McAdams estimated Microsoft's revenues in fiscal 1998 would rise 27 percent to $13.7 billion.
"The markets they're playing in could double the size of the company," he said.
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Ibexx
(long on MSFT since 1990) |
