MSFT beats, but guides lower going forward

[HenryTo]

Stock down approximately 2% in AH trading while I am typing this:
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Microsoft 1Q Earnings Rise 24 Percent
Thursday October 27, 5:04 pm ET
By Allison Linn, AP Business Writer
Microsoft First-Quarter Earnings Up 24 Percent on Growth in Personal Computer and Server Market

SEATTLE (AP) -- Microsoft Corp. said Thursday that earnings for its fiscal first quarter rose 24 percent, helped by strong growth in the personal computer and server market.
For the quarter ended Sept. 30, the Redmond-based software maker reported earnings of $3.14 billion, or 29 cents per share, up from $2.53 billion, or 23 cents per share, in the same period last year.

The most recent results included a charge of 2 cents per share to account for a legal settlement with RealNetworks Inc.

The results for the year-ago period included a one-time charge of $359 million, or 3 cents per share, to account for a legal settlement with Novell Inc.

Without the one-time charge, the company would have earned 31 cents per share, beating Wall Street estimates by a penny. Analysts polled by Thomson Financial were expecting earnings of 30 cents per share on revenue of $9.78 billion.

Revenue for the three-month period was $9.74 billion, up from $9.19 billion the same period last year.

For the current fiscal second quarter ending Dec. 31, Microsoft said it expects to earn 32 cents or 33 cents per share, on revenue of between $11.9 billion and $12 billion.

The revenue figure is slightly below the current Wall Street consensus estimate of $12.29 billion, which analyst Charles Di Bona with Bernstein & Co. said is likely what sent shares lower in after-hours trading.

Microsoft shares fell 26 cents, or 1 percent, to close at $24.85 in trading Thursday on the Nasdaq Stock Market. The results were released after regular trading. In after hours trading, shares were down an additional 65 cents.

Di Bona said the company performed well overall.

"It's not a bad earnings number," he said.

The company's guidance for the full fiscal year ending June 30 was little changed from the previous quarter's guidance for that period.

For the full fiscal year, Microsoft said it expects to earn $1.26 to $1.30 per share, including the 2 cent charge related to the RealNetworks settlement. The company had previously said it expected to earn $1.27 to $1.32 per share for the full year, without the charge.

The company did not change its earlier estimates for full year revenue of between $43.7 billion and $44.5 billion.

http://www.microsoft.com/msft