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

To: Eric Wells who wrote (47982)	7/18/2000 6:02:51 PM
From: JC Jaros	Read Replies (1) \| Respond to of 74651

Hi Eric - Suddenly, MSFT is a company who's results one is making excuses for. --- The evidence is that 'software' revenues are down industrially. The paradigm pendulum is swinging (has swung) into hardware/services. --- MSFT has no hardware and they have an uphill battle with services, inspite of how many MSN page hits they're getting. --- From my perspective, it doesn't look good. --- Disclosure: Long DoJ anyway <g> -JCJ

To: Eric Wells who wrote (47982)	7/18/2000 6:09:26 PM
From: Charles Tutt	Read Replies (1) \| Respond to of 74651

We can approximately adjust away the first two items you list. Subtract $100 million from the June '99 operating income (the $200 million revenues you cite at 50% margin), and add $269 million (the difference in sales and marketing) to '00 operating income. That would make the pre-tax operating comparison $2703/5521=0.4895 per diluted share in '99 vs. $2793/5537=0.5044 in '00, or an increase of about 3% if I've calculated correctly -- still pretty anemic. You'll have to tell us how much of an adjustment to make for item 3, but I doubt it will be enough to make this look like a blowout. All JMHO, of course. Or, if you prefer, JMOBO.