Microsoft Net May Exceed Estimates

Microsoft Corp earnings for its current fiscal third quarter will beat analyst expectations by about 9 per cent due to strong sales and declining expenses, chief financial officer Greg Maffei said on Tuesday.

Maffei said in a conference call with reporters and analysts he expects earnings of about $0.48 a share, compared with the consensus estimate of $0.44 and the $0.40 posted a year ago.

Maffei said revenues for the current quarter ending June 30 would be 17 to 18 percent higher than the $3.2 billion posted in the comparable year-earlier period.

Maffei also expected earnings for the fourth quarter ending June 30 to be slightly lower than the third-quarter, although still several pennies above the consensus estimate of $0.43 per share.

 

He cautioned that the current quarter could represent the best quarter of calendar 1998 in terms of earnings as growth continues to slow. Maffei said that, while Microsofts Asia business has not worsened recently, there is little evidence of improvement and the company remains cautious about prospects for the region.

He also cautioned about the potential for slowing sales of Office and of personal computers in general.

Meanwhile., a federal judge on Tuesday ordered Microsoft to remove the Java-compatible logo from two of its products while a lawsuit brought by Sun Microsystems Inc proceeds.

US district judge Ronald Whyte in San Jose, issued the injunction against Microsoft after a hearing on the issue last month, Microsoft spokesman Mark Murray said.

The ruling affects Microsofts Internet Explorer browser and Java software developers kit, both of which had been promoted as Java-compatible under a license arrangement with Sun.

Sun requested the injunction as part of its lawsuit charging that Microsoft has broken its license agreement by shipping versions of the Java technology that are incompatible with Suns standards.

We will immediately comply with the courts order, but we remain confident that once all the facts are presented in the larger case the court will find Microsoft to be in full compliance, Microsoft associate general counsel Tom Burt said.

We are disappointed by the courts decision, and we believe that Microsoft has been in full compliance with our contract with Sun, he added.

Murray said Microsoft had not yet decided whether it will appeal the ruling.