GO
Loading...

Microsoft Shares Hit Six-Year High

CNBC.com
Friday, 26 Oct 2007 | 12:54 PM ET

Microsoft shares soared to a six-year high Friday, after issuing a muscular first-quarter earnings report and raising its full-year earnings guidance the day before.

Microsoft
Microsoft

The Redmond, Wash.-based software maker's shares gained as much as $3.12, or 9.75 percent, at $35.11 on the Nasdaq.

Microsoft said its earnings were buttressed by a number of factors, including growing demand for personal computers loaded with its Windows operating system.

Gaming gave the company a large boost as well. Sales were very strong for "Halo 3," the latest installment in its popular "shooter" (i.e., combat-based) video game franchise. And users also bought Microsoft's Xbox 360 console to play the game, pushing September Xbox sales above rival consoles from Nintendo and Sony .

Wall Street was heartened by the long-tepid stock's climb and Microsoft's sunnier guidance, apparently putting aside continuing concerns over tightening credit, the subprime mortgage loan mess and record high oil prices: the S&P 500, Dow and Nasdaq indexes each rose Friday. The report pushed shares of other technology stocks higher Friday.

Microsoft Hits Hard
Shares of Microsoft are surging, and Brendan Barnicle, Pacific Crest Securities senior research analyst, shares his insight.

The world's No. 1 software maker said profit in its fiscal first quarter rose 23.2% to $4.29 billion, or 45 cents per diluted share, from $3.48 billion, or 35 cents per diluted share, in the year-ealier quarter.

Revenue rose 27 percent to $13.76 billion in the three months ended Sept. 30.

An average analysts' consensus had forecast 39 cents per share in first-quarter profit on revenue of $12.54 billion, according to Reuters Estimates.

Microsoft also raised its full-year earnings outlook to $1.78 to $1.81 per share, from a previous prediction of $1.69 to $1.73. It also raised its full-year revenue outlook by nearly $2 billion, calling for a range of $58.8 billion to $59.7 billion.

"It was a huge beat," said First American Funds Senior Analyst Jane Snorek. "The guidance I think is pretty good for the year. Guidance for next quarter is kind of in the middle of what I had."

"These are all huge [revenue] numbers in every division. I'm sure the [second-quarter] guidance is cautious. I'll take it," Snorek added. "This is going to be good for the tech sector."

Reuters contributed to this report.

  Price   Change %Change
MSFT
---
7974.T
---
6758.T
---

Featured

Contact Earnings Central

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More