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October 26, 2005

Speculation on Microsoft 1Q results

Posted by David Hunter at 1:12 PM ET.

Tomorrow, Microsoft will announce earnings for their fiscal 1Q2006 and Amanda Cantrell at CNN/Money has a preview, Microsoft: A window to 2006:

Early 2006 could bring a long-awaited renaissance for Microsoft — and not a moment too soon for many investors.

But anyone looking for a happy surprise when the world’s biggest software maker reports results Thursday may have to wait.

The Redmond, Wash.-based software company has wrestled with a stagnant stock price for years, but a round of new products due in early 2006 may fix that. In the meantime, however, it’s unlikely that customers will rush to buy software that they know will soon get a major upgrade.

The new products are, for the most part, arriving in late 2005 and then in 2H2006 and it’s rather more complicated than just customers delaying purchases, but you get the idea.

When it reported results last quarter, Microsoft projected first-quarter revenue between $9.7 billion to $9.8 billion; at the time, Wall Street had been expecting revenue of $9.9 billion.

“I think they will exceed guidance,” said Andrew Seibert, senior portfolio manager for S&T Wealth Management, a $1.2 billion, Pittsburgh-based money management firm that owns shares of Microsoft. “Microsoft and Intel have made a science out of lowering expectations so that people don’t expect them to blow the roof off things.”

We’ll find out tomorrow.

Filed under Financial, General Business

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