Microsoft met the street’s financial expectations: The company’s $26.5 billion in revenue and $0.71 in earnings per share were in-line. Its profit declined from the year-ago period, but that was expected due to prior one-time benefits, and the current fiscally deleterious impact of the company’s phone assets that didn’t exist in the year-ago quarter.

The company is down more than 4 percent in after-hours trading, drifting down further as time has passed. The company’s earnings call, which can sometimes reassure investors, did not. That’s likely due to the fact that Microsoft indicated on the call that it now expects to grow a mere 4 or 5 percent during its current fiscal year.

What is driving that limp growth? The company cited that it expects 4 points of revenue drag due to foreign-exchange-related issues alone moving forward. That, coupled with macro conditions that are weak in some markets, including Japan, and the prior impact of the XP end-of-life bump that has ended, are causing Microsoft’s top-line expansion to slow.

So was it all bad? Not at all. Microsoft’s hardware had a good quarter.

Source

A Guy

Posted By: A Guy
28 Jan 2015