) to underweight from neutral.
Analyst Brent Hill says fourth-quarter results were disappointing, with total revenue, Linux revenue, and earnings per share below his estimate. He says the combination of weak fourth-quarter results, increased future investments, and an inability to significantly temper decline in NetWare (down 11% year-over-year, and now the fourth straight year of declines) keeps him on the sidelines for now.
Hill cuts his 20 cents fiscal 2005 (Oct.) earnings-per-share estimate to 10 cents, and $1.26 billion in revenue to $1.2 billion.
He also cuts his 25 cents fiscal 2006 earnings-per-share estimate to 14 cents, and $1.34 billion revenue estimate to $1.28 billion. He cuts his $9 target price to $7.