Microsoft profits surge
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July 22, 1996: 9:01 p.m. ET
Company surpasses expectations with 52 percent earnings jump
From Correspondent Kitty Pilgrim
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NEW YORK (CNNfn) - Microsoft Corp. reported a 52 percent increase in profits for the fourth quarter Monday, beating analysts' expectations.
The company posted a nearly $600 million profit, or 87 cents a share, up from $368 million, or 58 cents a share, from the same period last year. Analysts had predicted quarterly earnings of 85 cents a share.
The software giant released the figures after the markets closed Monday, but even before they were announced, Wall Street was jumpy with anticipation. The technology sector suffered a major sell-off last week, and investors are sure to be relieved after a choppy few weeks for tech stocks.
"Microsoft is a real bellwether and these results should have a little bit of a calming effect, " said Jamie Kiggan, software analyst for Bear Stearns.
Microsoft's must-have status in most tech portfolios made its showing an important one for the industry, and a front-page story in the New York Times Monday built up expectations. The report talked up Microsoft's web browser as a strong competitor to Netscape, which produces the most popular browser. Shares in Netscape sold off on the article and general tech jitters set the tone for the day.
Microsoft seems to be doing a lot right these days. Its Windows software already dominates the personal computing market, and the company is now aggressively producing business applications, client server software and back office systems, which have been growing at a rate of 75 to 100 percent annually.
All this makes the company seem unbeatable. Rick Sherlund, tech analyst for Goldman Sachs, said the company's expansion into other markets is even more impressive. (407K WAV) or (407K AIFF)
Analysts cautioned that Microsoft management tends to speak very cautiously in quarterly statements, especially at this time of year, the beginning of the fiscal year. For that reason, no matter how good the earnings are, investors could read some negatives into comments and trade the stock down.
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Microsoft Corporation
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