A debut with the newest operating system, Windows 7, provided the Microsoft investors with a new hope to look forward. A fresh sign that businesses again want to spend on computers gave them the trust that the yearlong sales decline is coming to an end. It might require a big spending by consumers to pop Microsoft stock out of its tight trading range.
On the month of Oct., to close at 28.02, shares of Microsoft gained to 1.43 or 5.4%. The company reported economic first-quarter sales and profit before the market opened.
In the first quarter PC sales delayed
According to analysis, getting consumers to embrace Windows 7 will be the key for Microsoft’s earning. It will snap up more capable computers than the low-end mini-laptops that have accounted for the PC industry's insufficient growth. The one reason Microsoft isn't releasing a specific sales or earnings target for the current quarter is due to its difficulty of forecasting consumers' inconsistent buying behavior. According to an analyst the financial impact of Windows 7 will be driven by the consumer market and that's very hard to predict.
During the fiscal first quarter, sales of consumer PCs rose at a single-digit pace while those of PCs for businesses dropped at a double-digit rate.
Commerce stipulation will require to overturn course and consumer buying that will have to accelerate. We can speculate that a rapid sale of Windows 7 can propel the stock to 33 and put the company's price-to-earnings ratio of the tech industry. It can only be made possible if Microsoft can increase sales and earnings by more than 10% a quarter.
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