Newspaper article THE JOURNAL RECORD

Analysts Expect Software Makers to Post Mixed Quarterly Results

Newspaper article THE JOURNAL RECORD

Analysts Expect Software Makers to Post Mixed Quarterly Results

Article excerpt

Julie Chao

Dow Jones News Service

SAN FRANCISCO _ Software makers are expected to post mixed results for the first quarter, as consumers continue to buy personal computers but hold off on software upgrades in anticipation of new product releases.

Analysts said Microsoft Corp.'s market dominance in the software industry was strengthened by strong sales of PCs, most of which come pre-loaded with the Microsoft software needed to make the machines run. The company also continued to pick up market share in application programs, such as word processing and spreadsheets.

"Basically everyone who competes with them" is losing out, said Mike Kwatinetz, a PaineWebber Inc. analyst.

However, analysts expect slower sales growth in applications, due to the company's delay in releasing its highly touted Windows 95, the updated version its popular Windows operating system. The software acts as the go-between for the computer and application software.

The Redmond, Wash.-based company hasn't updated its suite of applications designed to work with Windows for more than a year; some customers are expected to defer purchases until the arrival of new applications tailored for Windows 95, which is scheduled to be shipped in August.

Microsoft will report net income of $375 million for its third quarter, or 60 cents a share, compared with operating income of $336 million a year ago, or 55 cents a share, adjusted for a 2-for-1 stock split in May 1994, predicted Rick Sherlund, an analyst at Goldman Sachs Co. He expects revenue to reach $1.5 billion, up from $1.2 billion a year earlier.

Lotus Development Corp. has been hit harder than most, losing out not only to Microsoft but to a new suite of office products that Novell Inc.'s WordPerfect division released in January.

Mary Meeker, an analyst at Morgan Stanley Co. …

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