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.
More Quotes from Rick Sherlund:
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.Rick Sherlund
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.
Rick Sherlund
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,
Rick Sherlund
We do not believe all the bad news is out yet in the software sector.
Rick Sherlund
We believe this provides little to no remedy, given that the operating systems business is still a monopoly business as determined by the court.
Rick Sherlund
Oracle may benefit from its presence as an Internet infrastructure provider as its applications and databases become more Internet centric.
Rick Sherlund
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