How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 478.47

-1.1%

Dec 12 3:59 PM EST

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To: Bill Fischofer who wrote (3441)	10/18/1997 12:50:00 AM
From: Ibexx	of 74651

Bill and thread, From Bloomberg News: _____ BN 10/17 Microsoft 1st-Qtr Profit Seen at 70c-Share: Earnings Outlook Expected Earnings Microsoft Corp. is expected to report first-quarter earnings a little better than 70 cents a share, the latest average estimate of 24 analysts surveyed by IBES International Inc. A year earlier Microsoft earned $614 million, or 48 cents a share, on sales of $2.3 billion. Time Microsoft is expected to report earnings Monday after the close of U.S. stock markets. Behind the Numbers Earnings are being driven by the company's staple product line -- Windows 95 PC operating system, Office 97 suite of business applications and NT network software -- while upgrades are in the pipeline. Analysts are looking for reassurances from company executives that growth in orders is still strong and that new programs are on schedule. Microsoft could defer recording more revenue on sales of operating system and Office 97 sales. In the fourth quarter, its deferred revenue rose by $133 million to a total $1.42 billion. Analysts said the company also could take charges for its acquisition of Web TV Networks earlier this year. What the Experts Say ''I think there's a potential for upside this quarter,'' said Mary McCaffrey, an analyst with BT Alex.Brown. ''You've seen good PC demand. You've seen demand with lower-priced computers. There's some growing acceptance of NT workstations and NT servers that carry higher prices. All of those things argue for incremental dollars for desktop (applications) and servers. Although there aren't any new blockbuster products, the overall trends are pretty good.'' Previous Market Reaction Microsoft shares fell 6 per cent on July 18 after Microsoft's fourth-quarter earnings of 80 cents a share exceeded expectations by only 1 cent. That was the slimmest that Microsoft beat expectations since the year-earlier quarter. Stock Trend The shares have fallen 11 percent from the record 149 1/2 on July 17, partly on concern that earnings growth will slow in the current fiscal year. The company warned analysts that marketing and sales expenses will grow faster than revenue. Analysts don't expect the company's updated Windows 98 software, for example, to start contributing to earnings until fiscal 1999. Ibexx

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