Microsoft shares fell 3.7 per cent on Wednesday, after the company reported disappointing results for the fiscal second quarter, but analysts were bullish about the outlook for the company in the current fiscal year.
“We believe that the company’s fiscal second half results are likely to be more in line with the consensus and the expectation of analysts, and we are expecting a net increase in revenue in fiscal year 2017,” said Doug Creutz, chief financial officer for the research firm BMO Capital Markets.
“This will be a significant positive step in the company moving forward.”
Analysts had expected a net decline in revenue of $2.7 billion in the fiscal year, but that was revised down to $2 billion.
“As we said at the start of the quarter, we think this quarter was one of the strongest quarters for Microsoft and we expect that to continue into the second half of the fiscal,” said Michael Nathanson, an analyst at Jefferies.
“The fact that the year-to-date profit was below expectations and that revenue is well below the $2B EPS expectation is significant, and Microsoft has a very good shot at achieving its goal of becoming a $50 billion company.”
Microsoft’s share price also rose 2.5 per cent, to $42.20.
Analysts are now expecting the company to post a net profit of $1.4 billion for fiscal 2017, bringing its total revenue for the year to $40.6 billion.
Microsoft’s latest earnings report came two days after it was forced to issue a public apology for a software flaw that led to hackers stealing personal data from nearly 200 million customers.
The company said in a statement that it has already begun work to fix the flaw, but it has not yet completed the software fixes.
Microsoft is expected to report an earnings release later this month, but for now the company has not released a full financial statement.