Microsoft jumps on upgrades
By Margaret Kane ZDII
Shares of Microsoft Corp. (Nasdaq: MSFT) jumped 13 percent in morning trading, as analysts began to sound cautious notes of optimism about the stock.
"We believe the worst may be behind us and look for a possible relief rally in the shares," wrote Goldman Sachs analyst Rick Sherlund in a research note.
Shares were up 6.69 to 58.44 in morning trading.
Microsoft topped analysts' expectations for the first quarter, fueled by strong sales of its Windows 2000 and Windows ME operating systems.
The company earned $2.58 billion, or 46 cents a share, on sales of $5.8 billion. First Call consensus was for a 41 cent per share profit.
"The worst is over for revenue growth," said Andrew Brousseau, an analyst with SG Cowen. "But there are lingering questions."
Brousseau said Office sales were disappointing and he expected sales to slow more in the next quarter. He added that growth in the mid-teens isn't bad, but that makes the stock fairly valued at current levels. Brousseau, who rates the stock a "neutral," said he would upgrade if he saw evidence that the company could deliver upside surprises with new products.
Sherlund said when unusual investment gains were excluded, revenues, before unearned revenues, were in line with expectations. He raised his 2001 earnings estimate to $1.91 a share from $1.88.
Merrill Lynch analyst Chris Shilakes also raised his fiscal 2001 earnings per share estimates, upping them to $1.90 a share from $1.86.
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