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Microsoft quarterly results better than predicted
Microsoft Corp reported better than expected quarterly profit and reduced its outlook less than many investors had feared in the face of tough economic conditions.
- Reuters
- Published: 23:33 October 25, 2008
Seattle: Microsoft Corp reported better than expected quarterly profit and reduced its outlook less than many investors had feared in the face of tough economic conditions.
While demand for its products softened near the end of the September quarter as uncertainty from the global financial crisis took hold, Microsoft said new releases of computer server software and database software pushed revenue higher.
"Investors were prepared for the worst given the credit crisis. Investors should be pleased with Microsoft's decent first quarter and only a modest reduction in full-year 2009 guidance," said Andy Miedler, analyst at Edward Jones.
Microsoft posted a net profit of $4.37 billion (Dh16.06 billion), or 48 cents per diluted share, in its fiscal first quarter ended September 30 versus a profit of $4.29 billion, or 45 cents per diluted share, in the year-ago period.
Revenue rose 9 per cent to $15.06 billion.
Conservative stance
Analysts, on average, were forecasting Microsoft to earn 47 cents per share on revenue of $14.8 billion, according to estimates.
The world's largest software maker said it saw technology spending deteriorate in September, with that downturn extending into October. The company expects the spending slowdown to continue until the end of its fiscal year in June.
"We're taking a more conservative stance going forward. That's clearly appropriate given all the news we see and what we see out there in the market," Microsoft chief financial officer Chris Liddell said in an interview.
For the full year ending June 2009, Microsoft forecast earnings per share to range between $2.00 to $2.10 on revenue from $64.9 billion to $66.4 billion. Microsoft's previous estimates called for earnings per share from $2.12 to $2.18 and revenue ranging from $67.3 billion to $68.1 billion.
"It's no surprise that they're guiding down. Microsoft likes to set achievable goals for themselves," said Kim Caughey, a senior analyst at Fort Pitt Capital Group.
Microsoft's Liddell said it plans to lower expenses by $500 million compared to its original spending plans through scaling back new hires, reducing travel and lowering marketing costs.
He also said the company plans to reduce capital expenditures this year on items such as data centres to $3.7 billion from an original estimate for $4 billion.
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