Iphone

This article looks at the optimism surrounding Microsoft's (Web Page Under Construction: sentiment, chart, options) upcoming third-quarter earnings report (slated for Thursday, April 26) after the release of the company's newest operating system, Vista. The article states that "although Microsoft has not released any recent sales numbers for Vista, the company in late March said 20 million Vista licenses had been sold in the month after its release, already surpassing sales of XP in the predecessor operating system's first two months of availability in 2001." According to an announcement by Microsoft Chief Financial Officer Christopher Liddell back in January, MSFT is targeting third-quarter revenue of between $13.7 billion and $14 billion.
Analysts on the Street are expecting MSFT to post earnings of 46 cents per share for the quarter, a 43 percent increase from the year earlier period. Some of this optimism comes out of news that the company has agreed to acquire voice over Internet protocol technology company TellMe Networks, giving MSFT a "leg up" against Yahoo! ( Coming Soon!: sentiment, chart, options) and Google (Wedding Dress, Bridal Show, Wedding Invitation, Wedding Gown, Wedding Cake, Wedding Reception Location, Wedding Planning, Wedding Photography, Wedding Idea and Bridal Registry at Bride.com: sentiment, chart, options) in the development of voice-based search services.
Contrarian Takeaway:

While there is a lot of talk regarding the benefits of Vista, there has been just as much complaining about the system's performance. Issues of security and of program stability have been voiced loudly throughout the tech-speaking world. Like it or not, this operating system is, for the time being at least, the face of MSFT, and until these glitches are worked out, many computer operators may be looking elsewhere.
I am leery of this abundance of optimism about MSFT, but I do like what the author, John Letzing, alludes to toward the end of his article. "Microsoft's spending on online services," Letzing writes, "a business far removed from its traditional cash cows of operating systems and office computer tools, has been a sore spot for some analysts." With so many rating the stock a "buy" or better, there is much room for downgrades, especially if issues like these remain in the minds of analysts.
Technically speaking, MSFT has seen wicked resistance at the 30 level on a monthly basis. Though the stock finished January slightly above this mark (30.86), this looks to have been an aberration. Other than this, MSFT has not ended a month above the 30 level since March of 2002.
Ian Stansel (istansel@sir-inc.com)