On Thursday Microsoft posted its first quarterly loss as a public company on Thursday. So why are the pros buyers?
This is a confusing report and even a little misleading. Especially because Microsoft has not suffered a quarterly loss since going public in 1986.
But the pros says what matters most for traders is that Microsoft said its unearned revenue increased to 21.1%. “That’s a leading indicator,” explains Tim Seymour.
Seymour is very bullish on the stock. “They have a strong catalyst in Windows 8 which is expected in the fall,” Seymour explains. “And they pay a nice dividend to sit and wait. All told, I'm a buyer.”
Kim Forrest of Fort Pitt Capital says much the same. “We own the stock… we’re delighted with the unearned revenue number and we’d buy more (after these results).”
Don’t be fooled by the loss, adds trader Guy Adami. The loss was largely due to a previously announced hit for writing down the value of its ailing online unit and suffered stagnant sales of its flagship Windows operating system.
"After these results, I think Microsoft pushes to $33 but even at that level I’m a buyer, too. Valuations are still quite reasonable.”
Excluding the multibillion-dollar write-down, which was signaled earlier this month, and factoring in some deferred Windows revenue, Microsoft actually exceeded Wall Street's expectations.