Feeds

How will the verdict hit the MS stock price?

It may be goodbye to beating the street

  • alert
  • submit to reddit

New hybrid storage solutions

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. ®

The next step in data security

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.