Microsoft can't seem to lose

Despite battling a lengthy antitrust investigation and consumer complaints about its newly released Windows 98 operating system, Microsoft is on a financial roll.

The software giant's stock--propelled by a string of better-than-expected quarterly earnings reports--has climbed so far, so fast, that the run-up has helped propel the technology-heavy Nasdaq to record heights despite mediocre performance from some Nasdaq stocks. Some Wall Street types have even joked that Nasdaq should be renamed "The Microsoft Index."

That being said, Microsoft will face a friendly audience when it holds its annual analysts meeting on its home turf Thursday--unlike the more hostile attention it will face at a congressional hearing in Washington to be held on the same day (See related story).

Analysts attending the meeting on Thursday will get more details from which to scrutinize Microsoft, and will try to figure out whether the software giant can maintain its financial streak. The press has been invited too, but must agree not to publish information derived from sources other than formal presentations or question-and-answer sessions with Microsoft executives.

Microsoft is being tight-lipped about what is on the agenda, saying only that top company executives will outline the company's products, financial picture, and strategies for the coming year.

Last year, Microsoft used the conference to announce Windows 98 and offer details about the future of the Office 97 application suite. It also laid out its corporate strategy for the year, predicting that Windows NT and the BackOffice package would drive growth.

In addition, Microsoft vice president Paul Maritz took pokes at Sun Microsystems' Java programming language, and said the software giant's development of Java would focus on developer tools that would run best on the Windows platform. Two months later, Sun sued Microsoft, claiming it was deliberately trying to sabotage Java's "write-once-run-anywhere" promise.

Indeed, it has been an eventful year for the Redmond, Washington, software maker, whose stock has soared more than 72 percent as the company has fended off the Justice Department, state attorneys general, and private competitors in several high-profile legal scrapes. Last week, Microsoft dazzled Wall Street yet again, reporting a 28 percent increase in net income during a year that saw no major product releases.

The financial performance of the company is becoming increasingly important to investors, whether or not they own Microsoft shares. That's because the software giant accounts for about 12 percent of the Nasdaq index, which is weighted based on a stock's market size. Last week, Microsoft helped Nasdaq break the 2,000 barrier for the first time.

Analysts attending Thursday's meeting don't expect to hear much that would cause them to change their earnings estimates or recommendations on the company.

"I don't think there will be a lot of surprises on the financial numbers, but they may give us a little more breakdown on the [financials] and go through all the products," said Mary McCaffrey, an analyst with BT Alex Brown. "Usually they give us doom and gloom for the first half an hour, and then 45 minutes on the future of the company."

McCaffrey added that Microsoft executives likely will argue that NT 4.0 is doing well and that there is no need to upgrade--especially since the release of NT 5.0 has been delayed.

"One area of interest will be what's the effect of the NT 5.0 delay. "I think their answer is that NT 4.0, even though its growth has slowed, is a fine placeholder [for NT 5.0]," she said. "The interesting numbers will also be on corporate licenses and the sell in [ to customers]."