<--OT-->MSFT firing on all cylinders not with gasoline but nitrous oxide.
Michelle:
Here is the latest update on MSFT from Bloomberg.Pay particular attention to the 'online prospects'.BTW is nitrous oxide a fuel,I thought it was the 'laughing gas',may be my man failed chemistry 101 you think or is it me who is not getting it?<g>
BTW since you expressed some concern about SQL in another post let me say that the SQL sales seems to be doing quite well according to this report.
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Technology News
Tue, 19 Jan 1999, 10:38pm EST
Microsoft 2nd-Qtr Profit Rises 75% on Strong Sales (Update4)
Microsoft 2nd-Qtr Profit Rises 75% on Strong Sales (Update4)
(Adds analyst comment in 4th paragraph. Adds details from
Microsoft's teleconference.)
Redmond, Washington, Jan. 19 (Bloomberg) -- Microsoft Corp.,
the world's largest software maker, said fiscal second-quarter
profit soared 75 percent, beating estimates, on strong sales of
its Office '97, Windows NT and other programs.
Net income for the period ended Dec. 31 leapt to a record
$1.98 billion, or 73 cents a share, from $1.13 billion, or 42
cents, in the year-earlier period. The average analyst estimate
was 59 cents a share, according to First Call Corp. Revenue rose
38 percent to a record $4.94 billion from $3.59 billion.
Microsoft's Office '97 business software package generated
strong sales almost two years after its introduction. The Windows
NT operating system, the linchpin of Microsoft's push into the
corporate market, gained as did its server software. Sales jumped
as companies installed more software to work out Year 2000 bugs
before the millennium arrives, Microsoft said.
''No one expected it (Year 2000) would be a net positive for
them,'' said Tom Hensel, an analyst with Everen Securities Inc.,
who has a ''buy'' rating on the stock. ''There was a concern that
things would be down. This is a reversal of that.''
Microsoft shares soared in after-hours trading following the
earnings announcement, climbing as high as 164 7/8. Earlier
today, the shares rose 5 7/8 to a record 155 5/8 in regular U.S.
trading. The stock has more than doubled over the past 12 months.
Beating Forecasts
With the latest results, Redmond, Washington-based Microsoft
now has beaten earnings forecasts for five quarters in a row. Its
buoyant performance in the December period followed the pattern
set last week by Intel Corp. and Apple Computer Inc., both of
which topped earnings expectations.
Office '97 is a group of word processing, spreadsheet and
presentation software. Among the company's server software, sales
of the Exchange electronic mail and SQL database management
programs did especially well, the company said.
''Microsoft is firing on all cylinders, with nitrous oxide
instead of regular gasoline,'' said Brett Berry, a portfolio
manager with Bailard, Biehl & Kaiser, after the results were
released. The fund owns 144,508 shares in Microsoft.
Concern about the year 2000 computer bug caused a spike in
Microsoft sales, the company said. Some older software confuses
the year 2000 with 1900 because it reads only the last two
digits. Companies worldwide are spending billions of dollars to
fix or replace their software to avoid year 2000, or so-called
Y2K, computer problems when the millennium arrives.
Many corporations bought and installed software in the
December quarter so programmers could tackle Y2K problems before
the millennium.
Still, Microsoft was cautious about growth prospects.
''We remain guarded about growth in 1999, given the
likelihood that organizations will reduce their non-Y2K-related
information technology spending and the uncertain international
economic outlook,'' Chief Financial Officer Greg Maffei said.
Maffei said on a conference call with analysts and
investors that he expects third-quarter revenue to decline about
$300 million from the second quarter, which ended in December.
Microsoft's fiscal third quarter ends in March.
The company expects third-quarter earnings per share to rise
25 percent from the year-earlier period. Maffei said analysts'
average earnings estimate are 2 cents to 3 cents too low.
Analysts expect the company to earn 60 cents in the fiscal third
quarter ending March, according to First Call.
It warned analysts that fiscal fourth-quarter earnings-per-
share estimates were 1 cent or 2 cents too low. Analysts expect
the company to earn 61 cents in the fiscal fourth quarter, ending
June, according to First Call.
Microsoft also expects third-quarter earnings per share to
fall ''quite a bit'' sequentially from the previous quarter.
While Microsoft's caution is well known, Berry said now may
be the time to heed it.
''Think ahead four quarters and how strong the performance
will have to be to justify the expectations,'' he said.
Online Prospects
Maffei said he was optimistic about Microsoft's online
profit potential. He said the company expects to equal the online
advertising revenue of America Online Inc., the No. 1 online
service, or Yahoo! Inc., the No. 1 Internet directory.
Microsoft's landmark antitrust trial, now into its fourth
month, apparently had no effect on the bottom line. The U.S.
Justice Department and 19 states have accused Microsoft of
unfairly using its monopoly in PC operating systems to crush
competitors in Internet software, such as Netscape Communications
Corp.
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