Johnnie, whisper was $.50 fyi:
15:45 DJS Microsoft, As Usual, Posts Strong Earnings, Cites Windows NT Sale
15:45 DJS Microsoft, As Usual, Posts Strong Earnings, Cites Windows NT Sales
NEW YORK -(Dow Jones)- Software giant Microsoft Corp. late Thursday
announced a 28% increase in earnings and a stronger-than-expected 26% increase
in revenue for its fiscal fourth-quarter ended June 30.
Microsft (MSFT) said net income came to $1.36 billion, or 50 cents a
share on a fully diluted basis, compared with $1.06 million, or 40 cents a
diluted share, in the year-earlier period. Revenue increased to $3.995 billion
from $3.175 billion a year ago..
The mean estimate of 24 analysts surveyed by First Call was for
earnings of around 48 cents per share. However, the so-called whisper, or
unofficial, number on Wall Street was for earnings of 50 cents a share. Rick
Sherlund, an analyst with Goldman Sachs, was looking for sales of between $3.7
billion and $3.8 billion.
For the fiscal year ended June 30, Microsoft said net income came to
$4.49 billion, or $1.67 a share on a fully diluted basis, compared with $3.45
billion, or $1.32 a diluted share, in the previous fiscal year. Revenue
increased 28% to $14.48 billion.
The company has enjoyed strong sales of products based on its Windows
NT operating system software and it also recently launched the Windows 98
software. Still, the grow rate has fallen a bit from previous quarters.
Macroeconomic factors such as overall computer sales have an impact on
Microsoft's numbers, but the company is also at the end of a product-upgrade
cycle. Another cycle is expected to start up in the fiscal second quarter
ending in December.
Analysts were divided as to how much of a boost Microsoft's earnings
would get from Windows 98. The product shipped June 25, five days before the
end of the quarter. The company warned not to expect much. The company
Thursday said more than 1 million retail copies of Windows 98 have been
purchased in North America since the release.
Microsoft is very conservative in its accounting practices and usually
spreads out sales of new operating systems over several quarters. Windows 98
may add to earnings in coming quarters, said Salomon Smith Barney Inc. analyst
Neil Herman. The fiscal fourth quarter's performance was primarily tied to the
Windows NT business, Herman said.
Windows NT, which runs the servers that host computer networks, and its
suite of server applications called BackOffice are increasingly becoming
Microsoft's most important growth engine. Microsoft said its Windows NT
Workstation software reached an installed base of 15 million units, while
deployments of the server version of Windows NT increased 200% in Fortune
1,000 companies in the past 12 months.
The company cautioned analysts when it reported its fiscal
third-quarter earnings that it expected slower revenue growth in the balance
of the calendar year because of the tapering upgrade cycle. Such cautionary
outlooks are frequently dished out by Microsoft. The Redmond, Wash., company
has been a model of consistency, racking up a series of quarterly profit
jumps.
Although makers of chips, disk drives and computers have struggled with
declining prices, shrinking margins and dwindling profits, most major software
producers have been far less vulnerable to those pressures.
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved.
07/16 3:45p CDT
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