Microsoft Shares Hit Six-Year High
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.
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.
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.