Rick Sherlund Estimate Quotations

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,

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,

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

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,

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.

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

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.