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Msft Earnings may increase by 28%
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Microsoft earnings seen rising by 28%
Software giant to release third-quarter results Tuesday
By Brenon Daly, CBS MarketWatch
Last Update: 6:09 PM ET Apr 19, 1999
Also: Tech Report
NEW YORK (CBS.MW) -- Microsoft is expected to report Tuesday
that fiscal-third-quarter earnings rose more than 25 percent, which may
give some direction to the battered tech sector.
Analysts surveyed by First Call expect Microsoft
(msft: news, msgs) to post earnings of 32 cents per
share. The 28 percent increase is expected to be
paced by continuing strong sales of Office 97.
"People are going to be focusing on what impact
the other tech events will have," said Everen
Securities analyst Tom Hensel. He rates the
company an "outperform" and thinks the company
will earn 32 cents per share on sales of $4.33
billion.
The report by the software giant comes against the
backdrop of disappointing earnings from Compaq
-- the world's largest computer maker -- and
lower-than-expected sales at Intel.
Shares of Microsoft closed Monday down 5 5/8 to
81 and have dropped 15 percent so far this month.
The decline came on a day that saw the tech-heavy
Nasdaq slide to its second-worst point decline. See
Market Snapshot.
Microsoft's chief financial officer, Greg Maffei, said last month that he
expected sales to hit $4.2 billion. That would be an 11 percent increase
for the company.
PaineWebber analyst Don Young said in a research note that he didn't
expect reports of slowing PC sales to crimp Microsoft's performance. He
pointed out that Microsoft gets about one-third of its revenue from sales
to PC makers.
Young projected that sales to PC makers would increase 15 percent in
the third quarter.
Microsoft is keying up two major products for
release. In mid-June, the company is expected to
roll out Office 2000, while the debut of Windows
2000 is slated for release before the end of the
year.
"Microsoft is putting a big emphasis on Windows
2000," Everen's Hensel said. "They're lining up
everything to capture other parts of business, but
it's all centered on Windows 2000."
The Justice Department's historic antitrust case
against Microsoft is currently in recess and is
expected to resume next month. "It doesn't seem
that it'll be a clear win for either side," said Hensel in reference to that
case.
Brenon Daly is an online reporter for CBS MarketWatch.
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