Rick Sherlund Quotations

We believe that there is a clear platform shift underway from earlier-generation client-server systems to more Internet-enabled client-server systems and the added new dimension of business-to-business commerce. Oracle appears to be out in front of this issue.

We believe this provides little to no remedy, given that the operating systems business is still a monopoly business as determined by the court.

significant bad news may likely already be reflected in the stock.

may be the twist that makes this more successful than other attempts to erode the (Microsoft) Office franchise.

Given the difficult transition for other companies that have made the switch (to subscription accounting), we view this with some relief for Oracle stock.

There is an increasing risk that Microsoft might atrophy on the PC platform as IBM did on the mainframe platform, while robust growth shifts to hand-held and wireless devices,

It certainly rippled through and affected a lot of companies.

I think the biggest impact, were there a delay, would be on the consumer sector, but given that the Department of Justice is not asking to block the launch, it doesn't look like there'll be much of an impact.

I think the big cloud on the horizon has been the Department of Justice lawsuit, but I'm becoming more optimistic, the longer they engage in negotiations, that a settlement may be possible here,

It is clear that something disrupted the supply of Xbox 360 shipments in the quarter. There does not appear to be any end-of-year catch-up in shipments.

I think that would take the stock down a lot. It would open them up to massive follow-on litigation.

I see Microsoft today saying, 'We understand that. Here's our first step in that direction, and how we address it.' That's all I think you can conclude today, is they're taking their first steps. They've gotta do it.

Oracle may benefit from its presence as an Internet infrastructure provider as its applications and databases become more Internet centric.

Oracle has an August quarter, so we are more compelled to cut estimates now. Siebel is September, so we could wait, but the numbers just look too optimistic. Given cost reductions, the EPS cut for Oracle is small, but the growth rates for Siebel are much faster, so EPS reductions more significant.

Oracle has an August quarter, so we are more compelled to cut estimates now, ... Siebel is September, so we could wait, but the numbers just look too optimistic. Given cost reductions, the EPS cut for Oracle is small, but the growth rates for Siebel are much faster, so EPS reductions more significant.

I think the Street's trying to figure out what is the long-term growth rate here,

Management will not comment on the status of the DOJ settlement discussions, but it appears to us that things may be heating up, ... There appears to be a flurry of activity on the settlement front, but no way of gauging probabilities.

The appeals court has twice overturned the judge in this case, so I think investors are optimistic that this case could be significantly modified or overturned on appeal.

Microsoft cannot easily be broken up. It is a unitary company with one management team, one headquarters, one set of sales and marketing offices, one sales force, one product support organization, one basic research unit, etc.

Microsoft's market cap right now is $208 billion. If you were to combine Ford and General Motors market cap(s) . . . that would only equal half of (Microsoft's) market cap. Granted, (Microsoft) by far is the premier growth company in the world today. But again, it is trading at 60 times earnings,

Microsoft's management has not changed its posture on the quarter, but we believe recent data suggests that Street estimates may need to come down,

Microsoft needs to show all the 'eye candy' features that reside in Vista.

might put a somewhat more favorable spin on the news and give investors some more tangible basis for optimism.

We have over 100 civil actions already filed. There's concern that this gives them some leverage going forward.

We hoped that March would be back on track and strong enough to bail out the quarter, but it doesn't look like it got there fast enough to really allow this company to climb out of the hole they dug themselves in for January and February.

We do not believe all the bad news is out yet in the software sector.

We have spoken with management and there are currently no plans for an pre-announcement, as business appears to be tracking in line with expectations,

We believe there will be an increase in revenue and earnings momentum and a corresponding benefit to the stock as Windows Vista and Office 12 upgrade cycles begin late in the year.

The quarter was pretty much in line, but despite all the hoopla the Xbox sales turned out to be better than we thought.

We are reducing our March quarter revenue estimate due to growing evidence that PC unit growth did not likely come up to our expectations. PC growth was very sluggish from November through February, and while it reaccelerated in March, it does not appear to have occurred fast enough to offset the weakness earlier in the quarter.

We picked the stocks that we thought had the biggest market cap, the strongest fundamentals, and importantly, a lot of liquidity, so you can get in and you can get out,

While not that material to the company, it is a step in the right direction. The bigger opportunity to Microsoft might be to encourage corporate customers in China to sign up for enterprise agreements to help better manage the implementation of new software such as Vista and Office 2007, although we see no reason to be encouraged at this stage.

We view this favorably for Red Hat, given our view that Red Hat will need to move up the infrastructure stack and add a database, application server, portal, and integration technology to deliver an open-source infrastructure stack to compete with that of BEA , Oracle , IBM and Microsoft .

We thought that they would do 1.3 million units, after all the difficulties shipping, so there is a sigh of relief on the Xbox 360.

We believe investors will need to hunker down for a potentially long process, possibly leading through appeal into 2001, ... For now, this will be a prominent issue but may become a back-burner issue during lulls in the action.

We are encouraged by this and have raised estimates, essentially back to earlier levels. While the stock is richly valued and the growth is still well below historic levels, we believe there is a good flow of upcoming new products and the shares are likely a relative safe harbor.

Extrapolating from Oracle as a bellwether for the rest of the software sector, we believe the September quarter results for the group will likely come in a bit shy of estimates,

We trimmed estimates last week to reflect even more sluggish PC demand, the potential for slower server growth and slower on-line advertising for MSN,

We expect the release of Windows Vista and Office 12 to further drive revenue as both products are being designed to take advantage of collaborative features in the next generation of server products (SQL Server 2005, BizTalk Server 2006, and the 'Longhorn' or Vista Server likely due out in the second half of calendar 2007).

As the year progresses, the stock will build its multiple.

Estimating results has been like catching a falling knife this year and we do not believe Street estimates yet capture the magnitude of capital spending constraints going into 2002, particularly considering anecdotal data coming out of Europe.

The results were above our estimates, which had been reduced during the quarter given evidence of slowing PC demand.

The stock may not yet be entirely out of the woods if the December quarter results do not show some further re-acceleration in corporate PC demand, at which point there may be a better basis for revising estimates further,

The stock had been at about this level just a month ago, and I think this is going to continue to be a damper, at least for the next three months or so. The news doesn't look like it's going to be good for a while.

Companies are reluctant to buy stuff that's disruptive to their infrastructure

Despite overall strong macro data, a recovery in the tech sector is lagging well behind the overall U.S. economy,

This effectively takes the wind out of the sails of investor sentiment at a time when investors were beginning to warm up to the prospects for accelerating earnings momentum.

They said the pipeline looks strong, but they've had difficulty turning that in to revenue,

It's bad to surprise the Street. It's harmful to the stock because investors are looking for the rewards of this big product cycle next year flowing through to earnings.

Consumer PC sales account for only about 10 percent of Microsoft's total revenues, so with corporate demand likely in line with expectations, our estimate revision is only relatively moderate,

The big cloud on the horizon has been the Department of Justice lawsuit,

It's not clear what the constraint on supply is.

In the whole scheme of things, are we ever going to remember when this product shipped, a few years down the road? No. It's going to be a big product. It's a question of timing.

Intel's pre-announcement will likely raise questions about the strength of Microsoft's March quarter.

I just don't think Judge Posner would be spending time on this unless they were making progress,

The macro economy in the U.S. is moving in the right direction, but it is taking longer to gain traction in the tech sector.

The company remains comfortable with our revenue and EPS estimates of $5.65 billion and 41 cents for the September quarter.