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Investors frustrated with the recent performance of



stock are unlikely to get much relief just yet.

The Redmond, Wash.-based company is expected to hit analysts' estimates but do little more than that when it reports earnings after the close of regular trading Wednesday.

"This quarter is going to be another squeaker," says William Epifanio, an analyst at

J.P. Morgan

, which hasn't done underwriting for Microsoft.

Analysts polled by

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First Call/Thomson Financial

expect the company will report income of 41 cents a share, up from 38 cents a share a year earlier.

Lehman Brothers

and J.P. Morgan figure the company will report revenue of $6.5 billion, a 5% increase from a year earlier. (Lehman hasn't done any recent underwriting for Microsoft.)

Much of the enthusiasm for Microsoft, held by one-third of all U.S. stock funds, has dissipated since July, when the company talked about waning corporate PC demand affecting its core business. A few key analysts' downgrades set off a stock slide that landed Mister Softee at its two-year low on Monday, at $49.56, before it ended the day at $50.38. It closed up 6 cents Tuesday at $50.44.

During the company's conference call Wednesday, analysts and investors will listen for news about whether the Windows 2000 operating system is making more inroads into large business networks. They also would like to see gains from the souped-up Windows Millennium Edition operating system, which was introduced last month for home users.

But don't expect more than cheery anecdotes from Microsoft's management on Windows 2000. Because the product was just released in February, sales won't pick up until this quarter, when companies have had time to install and review the product, analysts say. Indeed, as Lehman analyst Michael Stanek wrote in a research note Monday, "Everything turns on Q2 2001 guidance and how the Windows 2000 roll-out will look for next year."

Given this year's harsh environment for software stocks, investors probably will smack the stock down again if they hear even slightly negative comments about the adoption of the new software programs or hints at further downward revisions.

As for Microsoft's much-hyped .Net Internet-based subscription service model announced this year, no revenue is expected. ".Net is strategically important but financially inconsequential at this time," says J.P. Morgan's Epifanio.