Where Are the Downgrades Following Microsoft's (MSFT) PC Warning?
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WARNING Microsoft (Nasdaq: MSFT) shareholders: despite a recent verbal warning from a company executive on PC sales, analysts on Wall Street aren't budging.
Speaking at the tech industry's most important event, the Consumer Electronics Show, earlier this week, CFO and Chief Marketing Officer of Windows and Windows Live Tami Reller cautioned of greater-than-expected declines in PC sales during the fourth quarter.
Microsoft's Investor Relations GM Bill Koefoed echoed the sentiment, saying, "you'll likely see that number decline further as the impact has been felt faster than people had anticipated."
Gulp.
Que the downgrades...
Nope. There was not one downgrade of Microsoft following the warning.
Nomura's Richard Sherlund, among a handful of others, acknowledged the warning and trimmed estimates. On Wednesday, the analyst lowered his FY12 EPS estimate from $2.69 to $2.63.
Oppenheimer also trimmed estimates, saying "following our channel checks and management's recent commentary at a competitor's conference, we believe the PC market is more challenging than we had originally anticipated." The firm now expect FY12 EPS of $2.66 on revenue of $74.63B and FY13 EPS of $2.94 on revenue of $79.87B, down from their prior estimates of $2.68/$75.03B and $2.95/$80.28B, respectively.
With Microsoft slated to report second-quarter 2012 results on January 19th after the market close, there's still time for firms to downgrade. Should PC shipments fall more than expected, and Microsoft come in below numbers, than some selling might happen.
The good news for Microsoft is that its nearing the end of its Windows 7 product cycle. With Windows 8 expected to debut sometime in late 2012, PC and HDD issues should be fully resolved in time for the launch.
Analysts on the Street currently see Microsoft reporting earnings of 76 cents per share on revenue of $20.95 billion. Such earnings would be essentially flat compared to the same period last year. Notably, Microsoft beat the Street by about 13 percent with that report.
Speaking at the tech industry's most important event, the Consumer Electronics Show, earlier this week, CFO and Chief Marketing Officer of Windows and Windows Live Tami Reller cautioned of greater-than-expected declines in PC sales during the fourth quarter.
Microsoft's Investor Relations GM Bill Koefoed echoed the sentiment, saying, "you'll likely see that number decline further as the impact has been felt faster than people had anticipated."
Gulp.
Que the downgrades...
Nope. There was not one downgrade of Microsoft following the warning.
Nomura's Richard Sherlund, among a handful of others, acknowledged the warning and trimmed estimates. On Wednesday, the analyst lowered his FY12 EPS estimate from $2.69 to $2.63.
Oppenheimer also trimmed estimates, saying "following our channel checks and management's recent commentary at a competitor's conference, we believe the PC market is more challenging than we had originally anticipated." The firm now expect FY12 EPS of $2.66 on revenue of $74.63B and FY13 EPS of $2.94 on revenue of $79.87B, down from their prior estimates of $2.68/$75.03B and $2.95/$80.28B, respectively.
With Microsoft slated to report second-quarter 2012 results on January 19th after the market close, there's still time for firms to downgrade. Should PC shipments fall more than expected, and Microsoft come in below numbers, than some selling might happen.
The good news for Microsoft is that its nearing the end of its Windows 7 product cycle. With Windows 8 expected to debut sometime in late 2012, PC and HDD issues should be fully resolved in time for the launch.
Analysts on the Street currently see Microsoft reporting earnings of 76 cents per share on revenue of $20.95 billion. Such earnings would be essentially flat compared to the same period last year. Notably, Microsoft beat the Street by about 13 percent with that report.
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