MS press release...

[ccb at valinux.com (ccb at valinux.com)]

------- Forwarded Message
From: Larry Augustin <lma at valinux.com>
Date: Thu, 14 Dec 2000 14:44:40 -0800 (PST)


MS just warned that they won't meet analyst expectations for revenue
and profit.  This release showed up in my email:


Microsoft Says Sales, Profit Will Miss Street Expectations

Software Giant Blames Linux, Long-Term Outlook Bleak

A WSJ.COM News Roundup

REDMOND, Wash. -- Microsoft Corp.  warned late Thursday that revenue
and earnings for its current quarter will be shy of expectations,
blaming poor sales on market share erosion to Linux.

The company joins a parade of high-tech leaders that recently
cautioned investors of poor results. Compaq Computer Inc., Advanced
Micro Devices Inc. and Intel Corp, among others, issued profit
warnings earlier this month.

The software giant said it now expects revenue for the fiscal second
quarter ending Dec. 31 to be in the range of $6.4 billion to $6.5
billion -- about 5% below estimates -- and earnings of 46 cents to 47
cents a diluted share.  Analysts surveyed by First Call/Thomson
Financial were expecting a profit of about 49 cents a share.

The company also lowered its revenue and earnings guidance for the
remainder of the current fiscal year, which ends in mid-2001. The
company said it now expects full-year fiscal 2001 revenue to be in the
range of $25.2 billion to $25.4 billion, about 5% lower than
previously expected.

The company expects earnings per share for fiscal 2001 to be in the
range of $1.80 to $1.82. Analysts surveyed by First Call/Thomson
Financial were expecting a full-year profit of $1.91.

John Connors, chief financial officer of Microsoft, said in a prepared
statement: "Linux has had a devastating impact on our business.  We
are losing customers at an increasing rate to the free operating
system. Our long-term outlook remains difficult as Linux continues to
erode our market share."

Aside from the impact of Linux, Microsoft also blamed general weakness
in PC sales and corporate information-technology spending.



- -- 
Larry M. Augustin, Ph.D.			Email:  lma at valinux.com
President & CEO, VA Linux Systems, Inc.		Direct: 510.687.7029
http://www.valinux.com				Fax:    510.683.8680

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