) fiscal 2003 guidance to be conservative.
Based on PC and server demand, analyst Rick Sherlund says he suspects Microsoft's third quarter to be coming in about as expected. However, he says there are several important variables that are difficult to forecast. He notes that the software maker usually sets year-out guidance on its March quarter conference call. Based on preliminary comments from the December quarter call, along with subsequent public comments, he expects fiscal year 2003 (June) guidance will be conservative and probably below the Street consensus (average of $2.03 per share). Management appears to base this on expectation of little if any improvement in PC demand and potentially higher R&D spending, he says.
Sherlund currently sees EPS of $1.88 in fiscal year 2002 and $2.05 in fiscal year 2003.