SEATTLE (Reuters) - Microsoft Corp reported better than expected quarterly profit and reduced its outlook less than many investors had feared.
MICROSOFT (MSFT.NQ)cashed in on new releases of computer server software and database software, where it has been gaining share even in the gloomy economy.
"If you are a Microsoft investor you should be happy that Microsoft thinks they will weather the storm relatively well," said Toan Tran, an analyst at Morningstar Inc, who added that many had expected global economic weakness to crimp results for the world's largest software maker.
"But it was only marginally lower. I think people were expecting much worse," Tran said, referring to the company's forecast for future quarters.
Microsoft posted a net profit of $4.37 billion, or 48 cents per diluted share, in its fiscal first quarter ended September 30 versus a profit of $4.29 billion, or 45 cents per diluted share, in the year-ago period.
Revenue rose 9 percent to $15.06 billion.
Analysts, on average, were forecasting Microsoft to earn 47 cents per share on revenue of $14.8 billion, according to Reuters Estimates.
For the full-year ending June 2009, Microsoft forecast earnings per share to range between $2.00 to $2.10 on revenue from $64.9 billion to $66.4 billion. Microsoft's previous estimates called for earnings per share from $2.12 to $2.18 and revenue ranging from $67.3 billion to $68.1 billion.
Wall Street analysts were already forecasting earnings more conservative than the company's own previous estimates. According to Reuters Estimates, analysts, on average, forecast Microsoft to earn $2.11 per share on revenue of $66.4 billion.
For the December quarter, traditionally Microsoft's biggest quarter by revenue, the company forecast earnings per share to range between 51 cents and 53 cents on revenue between $17.3 billion and $17.8 billion.
Analysts were forecasting Microsoft to report earnings per share of 55 cents on revenue of $17.9 billion, according to Reuters Estimates.
Microsoft executives have said in recent weeks that the company is not immune from a downturn in spending from consumers and corporate customers even as they promote the view that the company's products and markets are diverse enough to better withstand an industry downturn than its rivals.
"One of the things we look at Microsoft for is their outlook for how business are doing, and it seems as if their business-oriented division did pretty well in the quarter," said Kim Caughey, a senior analyst at Fort Pitt Capital Group.
Caughey said Microsoft sets "achievable goals" for itself: "I do think spending overall is going to be muted in the future and this is what they're trying to portray."
Shares of Microsoft have fallen 19 percent since it last reported earnings on July 17. Microsoft stock closed at $22.32, up 3.7 percent, on the Nasdaq before rising to $22.70 in extended trade.
Shares of Microsoft, which had traded lower this week on expectations of a cut in its outlook, rose about 1 percent in after-hours trade after the announcement.
(Reporting by Daisuke Wakabayashi and Anupreeta Das; Editing by Phil Berlowitz)
