Microsoft Q2 Profit Falls; Windows Division Posts +24% Revenue Increase (MSFT)

After the bell on Thursday software giant Microsoft Corporation (MSFT) said its second quarter profit slipped, narrowly beating the Wall Street view, as the company continues to adapt to the decline of the PC market.

The Redmond, Washington-based company reported a second quarter profit of $6.4 billion, or 76 cents per share, down -4% from $6.6 billion, or 78 cents per share, earned in the same quarter a year earlier. According to FactSet, analysts were predicting MSFT to earn 75 cents per share.

Revenue for the quarter was up +3% from the previous year to $21.5 billion. This was narrowly below the analyst view of $21.6 billion.

Despite the lackluster reviews of the company’s newest operating system, the Windows division’s revenue increased +24% from the previous year. The Windows 8 operating system and Microsoft’s tablet, the Surface, are strategic product shifts to help adapt as PC demand declines.

Microsoft shares were down 24 cents, or -0.84%, during pre-market trading on Friday. The stock is down -7% over the past year.

The Bottom Line
Shares of Microsoft (MSFT) have a 3.33% dividend yield, based on last night’s closing stock price of $27.63. The stock has technical support in the $24 price area. If the shares can firm up, we see overhead resistance around the $28-$29 price levels.

Microsoft Corporation (MSFT) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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