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SEATTLE, US - MICROSOFT reported weak quarterly Windows sales and gave a current-quarter earnings forecast at the low end of Wall Street expectations, sending its shares down nearly 5 per cent on Thursday.
That overshadowed a strong fiscal 2009 forecast which came in ahead of Wall Street projections, even if the world's largest software maker is slightly wary about the economic outlook.
'We're being cautious just like everybody else,' Chief Financial Officer Chris Liddell said, referring to the economy. He said Windows revenue was lower than the company's expectations due in part to inventory build-up of computers, which was a 'quarter-specific' issue.
Microsoft posted a net profit of US$4.39 billion (S$6 billion), or 47 cents per diluted share, for its third quarter ended March 31, compared with US$4.93 billion, or 50 cents per diluted share, in the year-ago period. Revenue rose 0.4 per cent to US$14.45 billion.
Analysts, on average, were expecting 45 cents per share on revenue of US$14.49 billion, according to Reuters Estimates.
'Revenues came in a little bit light. The main culprit there was the (Windows) client business. The division that did really well was the entertainment business,' said Mr Tom Telford, portfolio manager at American Century Investments, which owns Microsoft shares.
The third-quarter profit a year ago got a one-time bump from revenue deferred by delays in releasing upgrades to the company's Windows and Office software.
The company forecast next fiscal year's earnings to rise by 13 per cent to 18 per cent, predicting strength from its software businesses. It projected earnings per share in fiscal 2009 starting in July to be in a range of US$2.13 to US$2.19 per share, and called for revenue of US$66.9 billion to US$68.0 billion.
Wall Street analysts, on average, had been forecasting Microsoft to earn US$2.10 per share in fiscal 2009, with estimates ranging from US$2.00 to US$2.20 per share, on revenue of US$66.5 billion, according to Reuters Estimates.
'It's nice that they're raising guidance for the rest of the year,' said Ms Kim Caughey, senior analyst at Fort Pitt Capital Group. 'Microsoft is an extremely conservative company with respect to guidance. That's always positive that they're raising guidance.'
Microsoft's March-quarter figures last year included 11 cents per share of extraordinary profit and US$1.6 billion in additional Windows and Office revenue for coupons issued to consumers affected by development delays. -- REUTERS
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