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

To: Ed Schultz who wrote (5184)	2/19/1998 1:16:00 PM
From: Ibexx	Read Replies (1) \| Respond to of 74651

All true and well known facts to the long-term Microsoft investors. Ibexx

To: Ed Schultz who wrote (5184)	2/19/1998 4:54:00 PM
From: johnd	Read Replies (3) \| Respond to of 74651

Ed, As Ibex indicated it is a well known fact. As of last quarter report MSFT had 2B in unearned revenue. I looked at the delta in the last 12 months and it is about 1 Billion that they have taken in incremental unearned revenue. Considering MSFT had 13B reported revenue, the 1Billion represents 1 over 13 or about 8% in additional revenue that they could have reported. If you correct the quoted EPS by 8% upwards, within some small inaccuracy you can get the correct EPS. You can also lower the PE by 8% to indicate the real PE without these unearned revenues effect. All said and done, the stock is trading at ~45+ PE and probably deserves it. The only people who should be concerned are the short term traders, over the next 2 quarters. If the "kissing cousin" quarters actually happen that way, i.e. EPS grows only 15% and 10% year over year. Then wall street has a tendency to dampen the stock (like they did from July 97 to Dec 97 when it went from 150 to 130 and a low of 118) johnd