CS First Boston Keeps 'Buy' on Microsoft

Analyst Wendell Laidley calls strong third quarter growth in the company's desktop software remarkable

Microsoft (MSFT ) posted $0.44 Q3 earnings per share. The software giant sees EPS of $0.41-$0.42 for Q4 and of $1.90-$1.94 for all of fiscal 2002. CS First Boston maintains its buy rating on the shares.

Analyst Wendell Laidley says the company's Q3 EPS surpassed his and Wall Street's $0.42 estimates on higher-than-expected revenues. He says virtually all of the revenue upside came from desktop software, which was remarkable considering that the March quarter was the worst-ever for U.S. PC unit growth. Contributing to Q3 results were strong Windows 2000 Professional growth, accelerating demand for .NET servers, and more widespread volume licensing.

The analyst raised his fiscal 2001 (June) estimates for revenue from $24.9B to $25.2B and for EPS from $1.78 to $1.80. For fiscal 2002, Laidley hiked his revenue forecast from $27.3B to $28.2B and his EPS projection from $1.89 to $1.94.

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