Analyst downgrades Microsoft on PC worries
By Cecily Barnes
Staff Writer, CNET News.com
December 13, 2000, 6:50 a.m. PT
Prudential Securities analyst Douglas J. Crook downgraded his estimates on Microsoft Wednesday, citing more ominous news about PC sales.
Crook urged investors to "hold" rather than "accumulate" Microsoft's stock, and cut his earnings estimate by one penny, to 48 cents per share, for the quarter ending Dec. 31. He also lowered 2001 estimates to $1.89 from $1.91, and 2002 estimates to $2.05 from $2.10.
Crook penned his report after Prudential researchers visited computer manufacturers in Taiwan, South Korea and Japan.
"What was found was that notebook and desktop computer demand may be flat sequentially, or even see an industry-wide sequential decline of as great as 20 percent in the December quarter," Crook wrote. "We believe either way this is unprecedented in the PC industry's history."
Crook was also concerned that chipmaker Intel may freeze, or even reduce, its capital expenditures next year.
Last week, Goldman Sachs analyst Rick Sherlund cut his earnings and revenue targets for Microsoft, sending the stock down 6 percent. In his research note, the influential analyst cited sluggish PC sales.
In early trading Wednesday, shares of Microsoft gained $1.75 to $60.12, rising on optimism that Republican candidate George W. Bush has finally won the presidential election. Bush is thought less likely to pursue the antitrust case against Microsoft.
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