Microsoft Corp. shares rose 9.7 percent to a record after the company reported fiscal third-quarter profit that far exceeded Wall Street estimates and analysts raised their earnings forecasts.
Microsoft shares climbed $9.50 to $107.62-1/2 in trading of 28.9 million, making it the most active U.S. stock.
Microsoft broke from its usual cautious tone, calling the quarter that ended March 31 a barnburner. It said that fourth-quarter profit will match the 79 cents a share it reported late Thursday.
“For those of you who think me always bearish, I should remind you that during our call last quarter I said we would have a great March quarter, and did we ever,” said Mike Brown, Microsoft’s chief financial officer.
Microsoft’s earnings - which beat the average Wall Street estimate by 16 cents - led analysts to boost their forecasts for the current quarter.
“Microsoft blew away the numbers and by virtue of that, analysts have to raise their numbers,” said Michael Stanek at Lehman Brothers Inc., who raised his fourthquarter forecast to 80 cents a share from 68 cents.
Microsoft’s net income surged 85 percent to $1.04 billion, or 79 cents a share, from $562 million, or 44 cents, in the year-earlier period.
Wall Street expected earnings of 63 cents a share, based on the average estimate of 22 analysts from IBES International Inc.
The numbers look even better when deferred revenue from Microsoft’s operating systems and Office 97 sales is added in, analysts said.
Deferred revenue rose about $272 million from the second quarter, and amounted to about 14 cents a share in the third quarter, said David Readerman, an analyst at Montgomery Securities. The 14 cents was not figured into the company’s 79-cent-a-share profit.
The Redmond, Wash.-based software maker said revenue rose on strong sales across the board, although standouts were the updated Office 97, Windows NT and Windows 95 software.
Office 97, the update of the spreadsheet, word-processing and database software released in January, is selling at three times the rate of any earlier versions.