(Adds analyst comment, financial details, updates stock price )
By Bill Rigby
SEATTLE, April 24 Microsoft Corp's new
chief executive got off to a winning start with Wall Street on
Thursday as the world's largest software company eased past
analysts' profit estimates despite the pressure of falling
Its shares rose almost 3 percent 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 percent since company
veteran Satya Nadella took over as CEO in early February
, and are up 19 percent since his predecessor
Steve Ballmer announced plans to retire last August, easily
outpacing the Standard & Poor's 500.
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 is set
to face analysts' questions for the first time in public on a
conference call later on Thursday.
"This quarter is a nice step in the right direction for
Nadella and Microsoft," said Daniel Ives, an analyst at FBR
Capital Markets. "We would characterize these results as solid
in a choppy IT spending environment."
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.
The Redmond, Washington-based company reported quarterly
profit of $5.66 billion, or 68 cents per share, compared with
$6.05 billion or 72 cents in the year-ago quarter.
The decline was exaggerated by deferred revenue boosting the
year-ago figure, and the latest quarter's profit beat Wall
Street's average estimate of 63 cents per share, according to
Thomson Reuters I/B/E/S.
Sales fell 0.4 percent to $20.4 billion, meeting analysts'
Personal computer sales fell by as much as 4.4 percent in
the quarter, according to the two major technology research
firms, making the eighth straight quarter of declines 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
(Editing by Cynthia Osterman and Matthew Lewis)