CS First Boston Keeps 'Outperform' on Microsoft

Analyst George Gilbert notes the software giant's blowout bookings and stronger revenue

CS First Boston says Microsoft 's (MSFT ) results were spectacular, and keeps its outperform rating.

Analyst George Gilbert notes the $7.75 billion revenue vs. his $7.4 billion estimate and the $7.13 billion consensus estimate. He also notes the $0.55 EPS (excluding a $0.05 impairment) vs. his $0.45 estimate and the $0.43 consensus. Gilbert says the upside from the blowout annuity contract bookings, original equipment manufacturers' revenue with the high-end Windows mix is up 25 point year over year.

To counter a claim that calendar 2002 growth is a bubble, Gilbert notes Microsoft is increasing revenue/PC/year by increasing the server attach rate to desktops, which gives it a greater installed base penetration.

After adjusting for the $0.05 impairment, Microsfot's new $2.00 fiscal 2003 (June) guidance is approaching his $2.02 estimate. He has a $70 target.

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