Microsoft (MSFT) Posted Strong Q1 Results - Analysts Show Love For Windows 7 Adoption
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Price: $501.02 -1.24%
Rating Summary:
58 Buy, 11 Hold, 0 Sell
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Today's Overall Ratings:
Up: 10 | Down: 7 | New: 64
Rating Summary:
58 Buy, 11 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 7 | New: 64
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Microsoft Corp. (NASDAQ: MSFT) flexed some muscle on Thursday with its first-quarter results coming in ahead of the Street's view on strong sales of its Windows and Office software.
The company reported fiscal first-quarter earnings of $5.4 billion or 62 cents per share, compared to $3.6 billion or 40 cents per share in the same quarter last year. Revenue for Microsoft rose 25 percent to $16.2 billion from $12.9 billion in the year-ago period.
On average, analysts had been looking for earnings of 55 cents from the company on sales of $15.8 billion in the quarter.
The Windows unit's revenue jumped 66 percent to $4.8 billion, as Vista was still on the market in the same quarter last year. Office and other business software sales rose 14 percent to $5.1 billion. Server software revenue rose 12 percent to $4 billion.
Shares of Microsoft are up 33 cents to $26.61 in early market movement on Friday.
Analyst Round Up
Goldman Sachs maintains a Neutral rating and a price target of $29 on Microsoft highlighting the company's cost controls in the first quarter.
Goldman Sachs analyst says, "We remain Neutral rated with an attractive valuation balanced by the risk of an elongating enterprise PC refresh cycle as we
enter CY2011 with IT spending expectations of about 4%, and long-term structural headwinds including the rise of new mobile platforms that threaten Window’s dominance and likely eat into core PC growth."
Soleil Securities reiterates a Buy rating on Microsoft with a price target $34.
Soleil analyst says, "Microsoft delivered another terrific quarter, blowing away our GAAP EPS estimate of $0.57 and the consensus EPS estimate of $0.55 by reporting $0.62 EPS in the quarter. In addition to controlling costs, the company delivered GAAP revenue of $16.2 billion, well above our estimate of $16.07 billion and the consensus of $15.8 billion, and up 13% adjusting for revenue deferrals a year ago...At the end of the day free cash flow is king, and Microsoft reported free cash flow of $7.63 billion, up 35% against a tough compare, no less."
"We are raising our current year GAAP revenue estimates from $68.08 billion to $69.18 billion and next year's revenue estimates from $72.25 billion to $73.57 billion and the current year GAAP EPS from $2.44 to $2.53 and next year's GAAP EPS estimate from $2.60 to $2.68."
Deutsche Bank sees strong momentum from Microsoft, as the firm reiterates its buy rating on the stock with a price target of $35.
Deutsche Bank analyst says, "MSFT's F1Q11 results exceeded expectations across all metrics. The performance in the quarter indicated a strong enterprise demand environment for MSFTs products. All the three major divisions grew double digits y/y, driven by strong enterprise adoption of Windows 7, Office, Exchange and SharePoint. Revenue upside and strong execution drove margins higher. A strong enterprise refresh cycle should sustain growth."
The company reported fiscal first-quarter earnings of $5.4 billion or 62 cents per share, compared to $3.6 billion or 40 cents per share in the same quarter last year. Revenue for Microsoft rose 25 percent to $16.2 billion from $12.9 billion in the year-ago period.
On average, analysts had been looking for earnings of 55 cents from the company on sales of $15.8 billion in the quarter.
The Windows unit's revenue jumped 66 percent to $4.8 billion, as Vista was still on the market in the same quarter last year. Office and other business software sales rose 14 percent to $5.1 billion. Server software revenue rose 12 percent to $4 billion.
Shares of Microsoft are up 33 cents to $26.61 in early market movement on Friday.
Analyst Round Up
Goldman Sachs maintains a Neutral rating and a price target of $29 on Microsoft highlighting the company's cost controls in the first quarter.
Goldman Sachs analyst says, "We remain Neutral rated with an attractive valuation balanced by the risk of an elongating enterprise PC refresh cycle as we
enter CY2011 with IT spending expectations of about 4%, and long-term structural headwinds including the rise of new mobile platforms that threaten Window’s dominance and likely eat into core PC growth."
Soleil Securities reiterates a Buy rating on Microsoft with a price target $34.
Soleil analyst says, "Microsoft delivered another terrific quarter, blowing away our GAAP EPS estimate of $0.57 and the consensus EPS estimate of $0.55 by reporting $0.62 EPS in the quarter. In addition to controlling costs, the company delivered GAAP revenue of $16.2 billion, well above our estimate of $16.07 billion and the consensus of $15.8 billion, and up 13% adjusting for revenue deferrals a year ago...At the end of the day free cash flow is king, and Microsoft reported free cash flow of $7.63 billion, up 35% against a tough compare, no less."
"We are raising our current year GAAP revenue estimates from $68.08 billion to $69.18 billion and next year's revenue estimates from $72.25 billion to $73.57 billion and the current year GAAP EPS from $2.44 to $2.53 and next year's GAAP EPS estimate from $2.60 to $2.68."
Deutsche Bank sees strong momentum from Microsoft, as the firm reiterates its buy rating on the stock with a price target of $35.
Deutsche Bank analyst says, "MSFT's F1Q11 results exceeded expectations across all metrics. The performance in the quarter indicated a strong enterprise demand environment for MSFTs products. All the three major divisions grew double digits y/y, driven by strong enterprise adoption of Windows 7, Office, Exchange and SharePoint. Revenue upside and strong execution drove margins higher. A strong enterprise refresh cycle should sustain growth."
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