Microsoft beats Wall Street expectations on new CEO debut

Friday 25 April 2014 09.19
New Microsoft CEO Satya Nadella
New Microsoft CEO Satya Nadella

Microsoft's new chief executive got off to a winning start with Wall Street last night as the world's largest software company eased past analysts' profit estimates despite the pressure of falling computer sales. 

Its shares rose almost 3% in after-hours trading to $40.96, keeping the stock at levels not seen since the turn-of-the-century Internet stock boom. 

Microsoft shares are up about 8% since company veteran Satya Nadella took over as CEO in early February, and are up 19% since his predecessor Steve Ballmer announced plans to retire last August. 

Investors are excited about Nadella's focus on mobile and cloud, or Internet-based, computing, designed to take Microsoft beyond its traditional PC-based Windows business. 

Nadella's emphasis on cloud computing helped its server software business, while a softer than expected decline in PC sales limited damage to the bottom line. 

Microsoft reported quarterly profits of $5.66 billion, or 68 cents per share, compared with $6.05 billion or 72 cents the same time last year. 

The decline was exaggerated by deferred revenue boosting they ear-ago figure, and the latest quarter's profit beat Wall Street's average estimate of 63 cents per share.
              
Sales fell 0.4% to $20.4 billion, meeting analysts'average estimate.
              
Personal computer sales fell by as much as 4.4% in the quarter, according to the two major technology research firms, making the eighth quarter of declines in a row as tablets and smartphones gain in popularity.
              
That decline was likely muted by the end of Microsoft's support for its decade-old Windows XP system in early April, which appears to have prompted many people to buy a new computer.