Seattle, April 27, 2009
Mint
Microsoft Corp’s quarterly profit fell 32%, but its shares rose as investors welcomed continuing efforts to cut costs and news that the release of its Windows 7 operating system is on track.
The world’s top software maker offered no profit forecast on Thursday, after withdrawing its outlook in January, but did say it expected the personal computer, server and hardware markets to remain weak for at least another quarter.
“While we would all like to think that our recovery will be soon and painless, we unfortunately believe that it will be slow and gradual,” Chief financial officer Chris Liddell said on a conference call.
“I didn’t see any improvement at the end of the quarter that gives me encouragement that we are at a bottom and coming out of it,” Liddell added, contesting comments last week from chip-maker Intel Corp that the PC market was over the worst.
Microsoft’s report, following strong earnings from Apple Inc and Google Inc this month, broadly pleased analysts, some of whom braced for worse.
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Microsoft shares rose 3% in after-hours trading to $19.48, after closing at $18.92 on Nasdaq. The stock has risen over 30% from a more than 10-year low of $14.87 in early March. However, it is still essentially flat for the year after ending 2008 at $19.44.
Curtis Shauger, an analyst at Caris & Co, said Microsoft’s stock has been “pretty cheap” and investors were expecting profit margins to be hit.
“Some of the cost cuts they have done are having positive impact,” he said. “People were fearing far worse.”
Microsoft said it was targeting $26.7 billion to $26.9 billion in operating expenses for the fiscal year, which ends June 30. That is below the $27.4 billion target it gave three months ago.
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