Bank of America Comments On Strong Q4 For Microsoft

According to Bank of America, Microsoft MSFT broke the trend from the last 4 Qs, which were punctuated with product cycle-powered upside. Bank of America said that March Q was mostly in line with consensus. “Revenues were $16.4bn (+13%) and EPS was $0.56 (excluding 5 cent one time gain). 13% growth is quite good, considering it's a normal comp against product cycle quarter last year. (See variance analysis on page 3.) All in all, solid performance in MBD, Server and Tools, and Windows 7 in business PCs (+9%) underscored Microsoft's strong execution in the enterprise market. Strong CFO and off-balance-sheet backlog were standouts. Consumer PC weakness both in core and netbooks (more severe) drove Windows revenues slightly lower than our estimate. Buybacks were also surprisingly thin. As we move past the anniversary of product cycles, Microsoft's total revenue growth of high-single digits with operating leverage still looks respectable.” Microsoft closed yesterday at $26.71.