Feeds

How will the verdict hit the MS stock price?

It may be goodbye to beating the street

  • alert
  • submit to reddit

Next gen security for virtualised datacentres

MS on Trial Microsoft's investors know very well that the company will not be able to make nearly as much money with its conduct closely monitored by the DoJ and Judge Jackson. A restrained Microsoft may therefore find itself unable to produce that little bit of extra revenue to "beat the Street" (financial analysts love this of course, and may well conspire to help achieve it).

For years Microsoft has put its tongue in its cheek, claimed that the future looks bleaker, and begged the financial analysts not to forecast results that are too good. At times, Microsoft has even talked down its share price - Ballmer did this with great success last year (and surely not because Microsoft was buying its own stock?). On the other hand, Goldman Sacks' Rick Sherlund tried to talk Microsoft's shares up, having been a bear earlier, and failed.

Next month, Microsoft can probably resume buying its own shares, and will hope to send the price up substantially to please - most of all - its employees. But there's a considerable downside possibility as well that must be factored in. On Tuesday, Microsoft's new CFO John Connors gave a keynote at the PaineWebber technology conference. He has previously admitted that the present 4th quarter ending 30 June would be a difficult one, and that the outlook for the next financial year was not so good either: he expects 15 per cent growth (20 per cent was "unrealistic"), and if this were to come to pass, the Street would not be happy.

He hinted that the DoJ case was interfering with growth when he said that "when the case goes into the appeals process I think we can have the kind of growth we feel good about...". Could that mean growth is behind the Street's expectations at present?

Connors was also pessimistic about the shortage of Pentium III chips, so that PC growth would be between 12 and 15 per cent in fiscal 2001. He admitted the PC consumer market had slowed - in Europe because of the weak euro, and in the US because of the stock market slump.

The more astute of Microsoft's investors may well be wondering if Microsoft will have to issue a profits warning at some stage soon, because of its inability to meet the voracious requirements of the Street. When IBM announced late last year that it expected some bad quarters - in effect it was a profits warning - its share price suffered considerably (until yesterday, funnily enough - when even Corel managed to put on more than 30 per cent). Sherlund claims that if broken up, Microsoft's value would be 15 per cent less. This may be a very modest estimate. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?