Microsoft beats profit forecasts, shares jump
By Bill Rigby
SEATTLE (Reuters) - Microsoft Corp cruised past Wall Street's quarterly profit and revenue forecasts on Thursday, helped by strong sales of its Office and server software to businesses, sending its shares up more than 5 percent after hours.
The world's largest software company is the latest tech firm to surprise investors with a powerful performance, coming the same day as Amazon.com Inc eased past average revenue forecasts.
Technology is proving one of the most resilient sectors in an uncertain economy, with 84 percent of tech companies beating earnings estimates for the latest quarter.
Analysts had trimmed profit targets for Microsoft over the past three months, concerned by the launch of an ambitious reorganization by retiring Chief Executive Steve Ballmer and the pricey acquisition of Nokia's handset business, even as the company's core personal computer market ebbs away.
"The earnings report will positively surprise the market, especially in the context of the soft expectations going in and the dismal report last quarter," said Todd Lowenstein, a portfolio manager at fund firm HighMark Capital.
"Beating on revenue and earnings handily will boost confidence that the reorganization is pivoting them in the right direction."
Microsoft said nothing about its board's search for a new CEO to succeed Ballmer, who announced in August his plan to retire within 12 months.
As part of its reinvention as a "devices and services" company, Microsoft now reports under two main groups, one covering its devices and consumer business, and one its commercial business. Continued...