INSTANT VIEW: Microsoft posts results, job cuts

NEW YORK (Reuters) - Microsoft Corp posted quarterly results on Thursday that missed Wall Street expectations, announced it would cut up to 5,000 jobs and said it could no longer offer forecasts for the rest of the fiscal year, sending shares down 8.5 percent in early trading.

Microsoft posted a profit of $4.17 billion, or 47 cents per share, in its fiscal second quarter ended December 31, versus a profit of $4.71 billion, or 50 cents, a year earlier. Analysts were looking for earnings per share of 49 cents, according to Reuters Estimates.

COMMENTS:

BRENDAN BARNICLE, ANALYST, PACIFIC CREST SECURITIES

"The interesting thing is that they chose not to preannounce these numbers. Most companies that are going to miss this badly would have preannounced."

"I think what's most damaging is their credibility. It's as if this is something that they discovered today. (To announce) at market-open, the whole follow-up, it's odd."

STEPHEN TAYLOR, ANALYST, DOLMEN SECURITIES, DUBLIN, IRELAND

"The market had expected job cuts of up to 10 to 15 percent of their workforce so maybe the cost cuts won't be as good as the market expected.

"The fact they're not giving a view for the rest of the year is a little disappointing for the market but given the strength of its balance sheet and its new Windows 7 product coming up this should be seen as a good long term buying opportunity."

YUN KIM, ANALYST, PACIFIC GROWTH EQUITIES

(ON TIMING OF RELEASE)

"I think it has a lot to do with the fact that they're going to let people go today."

(ON THE RESULTS)

"Obviously, the Windows business is down quite a bit... People were expecting that to be pretty bad, but this definitely came in a lot worse than what most people were thinking.

"Most surprising is that they will not issue guidance going forward. For Microsoft, a company of this size, to not issue guidance, is not reassuring for a lot of investors out there.

"Right now it's all about visibility... It's not what they did in Q4 and the December quarter, but what they're going to guide. That's what's going to drive the stock forward.

"They do a lot of things, but it is still heavily driven by their Windows business. That is where at least 52 percent of their profit comes from."

(ON LAYOFFS)

"It's probably the right thing to do at this point. They have not had a major layoff in or a significant one in quite a while.

"There's a lot of room for the company to be able to focus more on the operating expense side of the business without affecting the core business because a lot of it was investment spending."

RICHARD WILLIAMS, ANALYST, CROSS RESEARCH

"They definitely were substantially below our expectations for the quarter. Clearly, business conditions are worse than people were expecting.

"This is a substantial amount of jobs cuts. Microsoft has never had a layoff like this in my knowledge and it's sending a signal that the times are definitely changing.

"Somebody must have slipped -- that's the only thing I can guess would make them come out and preannounce their own earnings report."

THOMAS DI GALOMA, HEAD OF U.S. TREASURY TRADING, JEFFERIES & CO, NEW YORK

"The (economic) data was very bullish for the bond market. Then the market started to pick up some of this Microsoft news, where all of a sudden Microsoft is turning and laying off (up to) 5,000 people.

"That happens to be a very big development. Microsoft is a company people feel is in pretty good shape and they're laying 5,000 off. Who's next? You've got a deteriorating economy that is really helping bond prices. That's why bond yields are falling."

TOM SOWANICK, CHIEF INVESTMENT OFFICER OF CLEARBROOK FINANCIAL LLC IN PRINCETON, NEW JERSEY

"The Microsoft news tells us that the company is now a mature company and is now sensitive to the ebbs and flows of economic activity.

"The job cuts announcement is, like most company layoffs, a lagging economic indicator. Apple on the other hand announced record sales, which highlights the difference between a mature company versus a company that is still creative."

FRANK LESH, FUTURES ANALYST AND BROKER AT FUTUREPATH TRADING LLC IN CHICAGO

"They're cutting jobs just like everybody else -- another negative on the economy. More job cuts we don't need. Loss of revenue, we don't like seeing that either. Some of this was to be expected.

"I don't think (the futures) have sold off that much on it, we sold off more on the economic data, that's what casting a pall over the market. But this is not good news for Microsoft, there's nothing here to inspire buying, not even buying on weakness at this point.

"Everyone is waiting. We've got more to deal with right now, so there's no rush into anything right now. We'll get through the earnings season and see what issues have survived and what looks good, but there's no rush into anything right now."

TRIP CHOWDHRY GLOBAL EQUITIES RESEARCH

"It's a reflection of the extreme pain that's occurring in consumer tech spending as well as enterprise tech spending.

"Until the macro conditions are fixed there is no way a tech company can recover."

RICHARD SPARKS, SENIOR EQUITIES ANALYST, SCHAEFFER'S INVESTMENT RESEARCH, CINCINNATI, OHIO

"It is a negative surprise for the market, certainly from a bellwether technology company. For Microsoft to miss its guidance, it brings home the pervasive fallout from the credit crisis."

"On Wednesday, we had been able to bounce from the 8,000 level on the Dow. This (Microsoft news) makes it inevitable to retest the November lows for the market."

(Reporting by Paul Thomasch, Sinead Carew, Jennifer Ablan, Robert MacMillan, Ryan Vlastelica, Richard Leong and Burton Frierson)