MSFT Beat Expectations On Consumer PC Strength

Analyst Christopher Hickey of Atlantic Equities maintains his "neutral" rating on Microsoft Corp (NASDAQ: MSFT), while raising his estimates for the company.

Microsoft reported its FQ2 results ahead of the consensus, driven by strong consumer PC shipments, lower than expected COGS and strong retail sales of Windows 7. “Corporate demand for MSFT products remains relatively weak, with deferred revenue down YoY,” the analyst says.

Microsoft has provided directional guidance for F2H10 that is generally inline with expectations. “We anticipate 1-2% upward revenue revisions on higher PC unit assumptions but no major EPS changes,” Atlantic Equities adds. Atlantic Equities has raised its EPS estimates for FY10 and FY11 from $1.88 to $2.01 and from $2.10 to $2.19, respectively.

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