Shares of Microsoft (NASDAQ: MSFT) fell in after-hours trading after the world's largest software maker failed to wow investors.Net income at the Redmond, Wash., company fell to $4.39 billion, or 47 cents a share, on flat revenue of $14.5 billion. Analysts had expected profit of 44 cents on revenue of $14.5 billion. Revenue at Microsoft's Business Division, Client and Server and Tools businesses, the company's largest, fell during the quarter. The others, including the Entertainment and Devices unit, rose.
Pacific Crest analyst Brendan Barnicle told Bloomberg News that "people were expecting more of a blowout. It's a decent quarter. It's not a great quarter by any means, and people were expecting a great quarter.''
The earnings are puzzling because, as Bloomberg notes, "A report from researcher IDC showed personal-computer purchases exceeded forecasts in the quarter." Moreover, both IBM (NYSE: IBM) and Intel (NASDAQ: INTC) reported better-than-expected results.
No wonder Chief Executive Steve Ballmer is pushing so hard to buy Yahoo (NASDAQ: YHOO) to bolster Microsoft's growth prospects.
Microsoft expects profit in the quarter ending June 30 to be 45 cents to 48 cents per share on revenue of $15.5 billion to $15.8 billion. Analysts expected profit of 46 cents on revenue of $15.56 billion, according to Thomson Financial. Profit for the 2009 fiscal year will be $2.13 to $2.19 per share on revenue of $66.9 billion to $68 billion. That's greater than the average forecast of Wall Street analysts of profit of $2.10 and revenue of $66.5 billion, according to Reuters.
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Reader Comments (Page 1 of 1)
4-25-2008 @ 6:49AM
L R Adams said...
Surely your not buying into an 11 percent fall that is petty cash for these people. Unlike some companies if Microsoft has product that is coming off the line or on the loading dock they do not bill and ship later. Commonly *referred to as going to mortgage* we need to wait for *First Quarter results* to get a true picture.