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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: taxman who wrote (25326)	6/30/1999 7:40:00 PM
From: William Hunt	Read Replies (2) \| Respond to of 74651

Thread ---Microsoft Corp. Dow Jones Newswires -- June 30, 1999 DJ Microsoft Says Co 'Comfortable' With 4Q Earns View By Cecilia M. Kang PALO ALTO, Calif. (Dow Jones)--Microsoft Corp.'s (MSFT) chief financial officer said a change in the way the company classifies revenue will add 1 cent a share to fourth quarter earnings and a penny to fiscal 2000 earnings. In a conference call Wednesday to announce accounting and disclosure changes, Chief Financial Officer Greg Maffei said he is "very comfortable" with analysts' fourth quarter earnings estimates, adding he expects Wall Street to raise its estimates by one penny in light of the new classification system. A First Call Corp. survey of analysts' estimates has Microsoft earning 35 cents a share in the fourth quarter and $1.34 a share for fiscal 2000. Microsoft plans to announce its fourth quarter and fiscal 1999 earnings July 19 and said its conference call is generally unrelated to earnings. Maffei also said the Securities and Exchange Commission has launched an investigation into the Redmond, Wash., software company's revenue reserves. Triggered by a January story in The Wall Street Journal, the SEC requested information on Microsoft to review its reserves, Maffei said, adding "this investigation will not be material to our performance." Maffei said he has been aware of the investigation for a few months and that the investigation began around January. The accounting changes announced in the call are unrelated to the SEC investigation, he said. The Wall Street Journal reported in its Digits column on Jan. 14 that former Microsoft internal auditor Charles Pancerzewski charged in a wrongful-discharge suit in 1997 that the company manipulated hundreds of millions of dollars in its revenue reserves to make its profits appear more stable. In the case, Pancerzewski's lawyer referred to a 1995 e-mail message from former CFO Mike Brown to Chief Executive Bill Gates. In the e-mail, Brown wrote: "I believe we should do all we can to smooth our earnings and keep a steady state earnings model," according to a court transcript. Without disclosing terms, the two parties settled the case, according to the article. Maffei declined to elaborate on the inquiry, saying it is a private review by the SEC. BEST WISHES BILL

To: taxman who wrote (25326)	6/30/1999 8:16:00 PM
From: t2	Respond to of 74651

taxman, the reduction of margins is simply to add some of their products/services to their mainstream accounting since the revenues from these products are becoming significant to their top and/or bottom line. As a result, margins drop. Margins only matter in a company like Dell or Intel. MSFT's products are in a league all their own---the margins are just huge. This thing about the margins is meaningless in this particular case. Remember the margins on Windows, Office and other major software has not changed. Overall, this conference call is going to drive this stock up quite a bit tomorrow.