Microsoft CFO to leave; profit, shares rise
Microsoft Corp Chief Financial Officer Peter Klein is leaving at the end of June after 3-1/2 years in the post, as the world's biggest software company struggles with sharply declining personal computer sales and a lukewarm reception for the new Windows 8 operating system.
Klein, an 11-year Microsoft veteran, is the latest in a line of top-level executives to leave the company, following Windows head Steven Sinofsky last November. Some have questioned whether Chief Executive Steve Ballmer is still the right leader for Microsoft, whose shares have remained essentially flat for the last decade.
Microsoft shares rose 1.5 percent in after-hours trading.
"The CFO departure is a little bit troubling," said Brendan Barnicle, an analyst at Pacific Crest Securities. "We've had a lot of executives leaving Microsoft recently. This also makes a departure by Steve Ballmer less likely. It would be very unusual to have a CEO leave soon after a CFO departure."
Microsoft said a new CFO would be named in the next few weeks from within its own ranks.
The company reported a profit of $6 billion, or 72 cents per share, in the fiscal third quarter, up from $5.1 billion, or 60 cents per share, in the year-ago quarter. That beat Wall Street's average estimate of 68 cents, according to Thomson Reuters I/B/E/S.
Analysts have been pegging back profit forecasts for Microsoft in the light of flagging PC sales. As recently as April 5 the average analyst estimate was 76 cents.
Profit was boosted by some deferred revenue from its Windows, Office and video game operations, but cut severely by a $733 million fine by European antitrust regulators for breaking promises relating to expanding the choice of Internet browsers on Windows.
Excluding gains from deferred revenue, Microsoft's flagship Windows unit showed no growth at all, disappointing investors hoping for a stronger showing from the new Windows 8 system.
"There's nothing in the report that's going to make the stock break out of the range that it's been in," said Colin Gillis, an analyst at BGC. "The stock's trading at $29.11 - what we were at 11 years ago."
Overall, sales rose to $20.5 billion from $17.4 billion a year ago, in line with analysts' estimates.
(Reporting by Bill Rigby; Editing by Richard Chang)