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Technology Stocks : PSFT - 1997 Outlook [closed thread] -- Ignore unavailable to you. Want to Upgrade?

To: Raptor who wrote (633)	12/9/1997 11:39:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 940

Hi Raptor, I appreciate your recap of PSFT. I would just like to add a couple of thoughts about PSFT's growth. It seems to me that growth has been spurred by a combination of excellent marketing, rapid installation and implementation leading to excellent customer satisfaction, and a very clever method of growing the products they carry (as in Campus software). It could very well happen that PSFT will be dragged down by ORCL for the rest of the year, but remember that the CEO said he was comfortable with 75% growth for the remainder of the year, and bearing in mind that "deferred revenues" gives us a wonderful window on upcoming revenues we migh have an excellent buying opportunity between now and publication of earnings. OFF TOPIC BTW, Hank McNabb is from Arkansas, and I've been giving him a hard time over his belief in T/A. If he wants to tweak my nose a bit, I don't mind. He's gotten so rich off of T/A that I understand that he's funding a retraining institute for out of work dowsers <VBG>. Regards, Paul

To: Raptor who wrote (633)	12/10/1997 9:00:00 AM
From: Melissa McAuliffe	Respond to of 940

Raptor, Before I get to the main message let me quote from the SI rule book.."A member is allowed 5 "!'s" and 3 "?'s" every 30 days. So there.<g>. I wanted to offer my thoughts on the Y2K, slowing applications revenue, etc. issues. With respect to ORCL(which unfortunately impacts PSFT stock price)..I too have had concerns about ORCL since last quarter when they had slowed data base growth which supposedly they had predicted because of the success of the prior year. This quarter they had slowing(very)applications growth which they supposedly had also predicted for the same reason as the declining database growth last quarter. At least I read they had. Unfortunately, I read so much yesterday I don't know where. I did not hear either or these statements prior to their earnings' releases. However, where were the analysts when they made these statements!(Note: This ! counts as one of my 5<g>). Now if both Raptor and I have had concerns about ORCL for a while here I seriously question why these "supposedly" expert, highly paid analysts still have jobs. Now on to PSFT... Obviously there have been some amount of Y2K pressures driving applications sales and at some point there should be a drop off in sales for this reason alone. So it is important to look at the company and ask yourself how will they compensate for this. In the case of PSFT, I can see several things. A)Their manufacturing sales will start to kick in. A fairly new addition to the product line which should generate significant dollars going forward. Not only additional revenue per sale but also to gain the abiilty compete in situations where they might have previously been excluded.Their focus on the smaller company market. B) Again, NEW, revenue. C) Expanded penentration into the higher ed market. So, as revenues purely attributable to Y@K sales starts to decline these others should start to grow. Also, growth can potentially come through acquisitions. ORCL says they predicted the decline. PSFT says they see future growth. Two very different statements. I am sure we will see a point where PSFT cannot sustain 75-80% growth. But don't think we are there yet and may not be for some time. The only thing I am still somewhat concerned about is the statement I referenced earlier on this thread from their last quarterly report with respect to changes in revenue recognition standards potentially impacting revenues. I had somewhat put this out of my mind but it was brought up again yesterday. One of the reasons ORCL also attributed to their poor performance was getting much larger deals on which they could not recognize some or all of the revenue. I am concerned about this because I was under the impression that these new rules had already been adopted by most companies prior to this new FASB which I believe is now formally in effect or soon to be. If so, why did they throw in this disclaimer? That still doesn't make sense to me.I would hate to see a bad quarter(e.g. only 40% growth)and have PSFT say they had previously discussed this issue. In many ways ORCL is lucky because they can blame most of this on the Asian situation. I think that under all that ORCL has some serious internal problems. I don't think PSFT is in the same situation but unfortunately many people (and especially analysts) probably won't figure this out. Also remember, this is PSFT's 4th quarter...should be a big one. So if the stock drops some more in sympathy or concerns about decling applications sales expect it to be back in January. If it does drop, I may either buy more stock (not at a much more affordable price) or buy some calls. Can't say yet but maybe Hank was right about shorting PSFT (short term) but for ALL the wrong reasons as far as I can see. But who knows, maybe people out there are smarter than I think. Melissa