Microsoft and eBay keep high hopes alive

Microsoft kept alive hopes that sales by hi-tech companies have reached their low-point when on Thursday it reported financial results that beat estimates from industry analysts.

A slew of other hi-tech companies, including such diverse businesses as Nortel, Sun Microsystems, Gateway, Inktomi and eBay, joined the software company in announcing results that either met or bettered expectations, which may well lead to a continued rally in the badly battered US share markets.

Only Nortel added to the woes of workers who are facing layoffs. It said it would raise the number it was sacking from 15,000 to 20,000. In a dig at arch-rival, Hewlett Packard, which earlier this week said it was firing 3,000 managers, Sun said it was still adding to its payroll.

It was Microsoft's top-line sales growth of 14 per cent to $6.46bn that impressed most and sent itd share price up more than $4 in after-market trading to $72.39.

The company attributed that sales growth to strong demand for Windows 2000. In addition, Microsoft chief financial officer, John Connors, said in a conference call that the company's .Net strategy was grabbing "mindshare" as well as revenue.

Profits came in two cents per share better than analysts estimated, at 44 cents or $2.45bn, and led one Microsoft watcher, Richard Garner of Solomon Smith Barney, to remark: "Microsoft is still the best place to be in software right now."

Microsoft was typically cautious about prospects going forward, as were most of the other hi-tech companies who reported on Thursday.

The one exception was eBay, which said it has suffered no slowdown whatsoever. Turnover was $154.1m, up 80 per cent over the same quarter last year and above the analyst consensus estimate of $149.1m. Profits were $30.6m, or 11 cents per share, to beat the 8 cents analysts' estimate.

Unlike almost every other company, eBay raised its guidance for the coming quarters and said it was en route to having revenues of $2bn in a couple of years.