MICROSOFT CORP. (MSFT) 98 7/8 CLOSED. Amazing! This software company continues to surprise, despite its many detractors that could easily force the company to lose focus. Microsoft again delivered better than expected numbers that must leave many investors very pleased, along with its competitors eating more crow. The company earned $0.50 a share in Q3, two cents ahead of the First Call estimate, and 25% ahead of year-ago net of $0.40 a share. Revenues rose 18% from a year-ago to $3.77 billion, and 5% on a sequential basis, helped greatly by sales of its Office 97 product. While Microsoft managed to shine basically across all regions, sales in Southeast Asia did fall by 8% from the December quarter. And as always, Microsoft issued its boilerplate cautionary statement about a slowing trend. The company cautioned about Q4 earnings falling below Q3 and sales coming in flat with its Q3 level. It also said that Windows98, which is due to be released in late June, won't provide a large revenue boost, and Asia will continue to dampen performance. Microsoft was also cautious about the first half of fiscal 1999 as management is concerned that the Year 2000 problem will force corporations to defer new purchases and instead focus on its existing equipment problems. It also noted that the Windows NT update is not expected to occur until the end of this year or the beginning of next, although when it does occur, it will be a large revenue generator. Nonetheless, if any company is going to survive a major market slowdown because of problems in Asia, a slowdown in PC sales, or lack of new product revenue generators it is going to be Microsoft. While this time around the company may be correct in raising a cautionary flag, if investors need a safe haven to park their money, there is still no better place than with Mr. Bill.
From Briefing.com |
