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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Captain Jack who wrote (58766)	4/19/1999 4:27:00 PM
From: Night Writer	Respond to of 97611

Microsoft seen beating earnings estimates By Martin Wolk SEATTLE, April 19 (Reuters) - While concerns about slowing personal computer sales growth are roiling the stock market, software giant Microsoft Corp. <MSFT.O> is expected to report another strong quarter Tuesday, beating expectations. On average, analysts expect Microsoft to report earnings of 32 cents a share for its fiscal third quarter, an increase of 28 percent over the 25 cents reported in the comparable year-earlier period, according to First Call. But even though Microsoft said last month it would defer $400 million in revenue to its fourth quarter, most analysts said they expected Microsoft to beat the consensus number by at least 2 or 3 cents a share. Revenues are expected to be in the $4.2 billion range, up about 11 percent. "There's a little bit of concern out there in the market for software companies, so I think they're going to want to ease people's concern with them by reporting a strong quarter," said Steve Shepich of Olde Discount Corp., expressing the commonly held view -- denied by Microsoft executives -- that the company manages its reported earnings. Microsoft was off $3.625 at $83 in heavy afternoon Nasdaq trading Monday, as technology stocks were routed. Microsoft, still up more than 150 percent this year, surged to a new high earlier this month, in part on optimism the company might settle its long-running government antitrust case. Although Microsoft lawyers met with their government counterparts, the federal court trial is expected to resume next month after a lengthy recess. "The business model is very solid," Shepich said. "The real uncertainty is what's going to happen in the trial." Analysts said Microsoft is somewhat insulated from computer sales trends because of its diverse line of products, a gradual market shift to its more expensive Windows NT operating system and a practice of deferring revenue that helps smooth quarterly peaks and valleys. In addition, Microsoft's results generally reflect revenue from computers sold months earlier, making the company a lagging indicator of the industry's health. That health was called into question when Eckhard Pfeiffer, chief executive of Compaq Computer Corp. <CPQ.N>, resigned nine days after the No. 1 personal computer maker warned of an earnings shortfall. "There is no doubt that if there is a serious PC slowdown, no one selling PC software is going to be immune," said Bill Epifanio of J.P. Morgan. "You have to look for what Microsoft has to get it through a slowdown." Analysts expect Microsoft's revenues to accelerate over the coming year with the release of Office 2000 in early June and Windows 2000 by the end of the year. ((-- Seattle bureau 206-386-4848, marty.wolk@reuters.com)) REUTERS