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Walter Pritchard, Citigroup research analyst, gives his analysis of Microsoft ahead of the company’s earnings report today.
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-- my my Chris -- reports earnings after the bell today if you didn't know we've been done about all bank had time is releasing windows eight in October.
Totally overhauling its office software coming out of the new tablet says the time to buy the stock.
Joining us now Walter Pritchard Citigroup research analysts.
You know the stock is up -- 3% over the last five years for those who have been sitting around waiting for this thing -- date though up 18%.
56% of the time the company surprises what do you expecting to year after hours today.
I'm thinking the -- is somewhat of a non event I think people as you mentioned there are lined up looking -- windows Aden and you know that was being the most important product is companies probably shift in in the last decade I think and he.
You're not gonna get a lot of data off off the column out product and I think really.
You know the next six months there are going to be important but I don't think the next six hours well.
Interesting because it I'd still like there's a lot of pressure on windows eight to really not not Abbott park great mean that we -- Teradata doesn't really understand is going to be a touch -- so on your computer can actually touched.
And -- -- very welcome disappoint.
Well so I guess what I'm saying is is I don't think you're gonna get any information this afternoon that's really gonna give you any any any more conviction or lack -- conviction on -- say.
Are you on windows a Disney does need touch to shine I think in the second half of this year there's just not gonna be enough touch hardware out there really get people.
Excited about a computer I think as you go into next year especially around mid year you start to see pricing on touch hardware come down.
And at that point you're gonna locking your favorite electronics store and see lots of computers you can -- I think about point people's opinion about computer changes.
Seven what is this company is it a software company I mean is that hardware company could actually in the Xbox.
Ready witty put it these days not.
It's I think it's absolutely software company I think if you look at Xbox go back you know ten years ago or so I mean this company wanted to do something that I think their hardware partners -- willing to take a bet on.
They had to kind of make about themselves and I think surface here with this tablet similarly they've done some pretty and it's pretty innovative things.
With the hardware and I think right now the razor thin margins in the computer industry just don't have OEMs.
That are willing to make big bets and Microsoft had to make those -- that's first and and and come out the product themselves it to show what was.
Awful but -- -- a soccer coming then do you worry about the you know the deceleration of the PC business.
Well I think it's I think I think it's frankly been in the stock for about five years and I think that -- the opportunity here for is for that to re accelerate but I think absolutely that's that's the key concern for this company.
OK so.
Are you buying into earnings tonight.
I honestly don't have a lot of conviction I I feel what what we've been telling clients over the last over the last three months is that.
We actually seeking get a better opportunity to buy the stock into the windows a launch because I think it as I mentioned.
Without -- -- without -- been widespread I just don't I don't think it creates a kind of excitement -- some people are hoping so.
We're we're we're really looking to the wind is a launches that potential slight disappointment and a time to buy stock.
20% dividend out there -- some -- smarter than me -- get paid to wait do you do that instead.
On the company has been -- cash returns I think people are just looking for more than -- but no doubt that that's a great baseline returns for the company.
Yeah otherwise you know over the long term that -- look like -- a flat line Walter Pritchard of Citigroup banks.
