Microsoft Shares Hit A New High

Microsoft Corp. shares rose 4.2 percent after the company reported second-quarter earnings that beat analysts’ expectations.

Microsoft shares rose 3 5/8 to 90 3/4 in trading of 18.3 million Monday, making it the most active stock in U.S. markets.

Microsoft Chief Financial Officer Michael Brown said Friday after releasing the earnings report that he’s optimistic about growth during the next two quarters. Sales and earnings are expected to be boosted by the new version of Microsoft’s Office package of database, word-processing and spreadsheet software, which went on sale in stores last week.

“The numbers in the report were obviously very strong,” said Jean Orr, an analyst at A.G. Edwards & Sons.

Microsoft shares were reiterated a “strong buy” by Cowen & Co. and many analysts raised their estimates for fiscal year 1997 and 1998.

Microsoft, the world’s biggest independent maker of personal computer software, reported a 29 percent increase in second-quarter profit. Revenue and earnings rose on higher sales of its Windows NT and 95 operating and business software.

Net income rose to $740 million, or 57 cents a share, from $575 million, or 45 cents, in the year-earlier quarter. Revenue for the quarter ended Dec. 31 rose 22 percent to $2.68 billion from $2.20 billion.

Wall Street expected earnings of 51 cents, based on the average estimate of 22 analysts polled by IBES International Inc.

The Redmond, Washington-based company, which is typically cautious about growth in its forecasts, also warned of slower growth beginning in July, the start of its fiscal-year 1998. The company, though, said the warning came because the second-quarter results were so much better than expected.

“Microsoft was saying ‘Just because we’re raising the bar (this quarter) doesn’t mean you can expect the same growth rate in 1998,’ ” Orr said.