Microsoft CFO Peter Klein quits amid tough times
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.business Updated: Apr 19, 2013 23:10 IST
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.
The 11-year Microsoft veteran becomes 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 said a new CFO would be named in the next few weeks from within its ranks.
"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 shares rose 1.5 percent in after-hours trading after the company posted an 18 percent climb in revenue and earnings well ahead of Wall Street expectations - a seemingly strong performance for a quarter with the worst decline in PC sales on record.
But excluding revenue "deferred" from previous quarters, the flagship Windows unit showed zero growth, disappointing investors hoping for a stronger showing from the new Windows 8 system.
Many in the industry had hoped the arrival of Microsoft's touch-friendly Windows 8 software might give the shrinking PC market a shot in the arm. But industry analysts have since noted that the unfamiliarity of the 'tile'-based interface and the paucity of competitive-priced gadgets turned off consumers.
This week, Intel Corp (INTC.O) forecast its current-quarter revenue would decline as much as 8 percent as personal computer sales continue to slide in favor of tablets and smartphones, though it expects sales in general to improve in the second half as more polished ultra-thin laptops and other tablet devices based on Windows hit the market.
On Thursday, Microsoft 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.
But 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.
Overall, sales rose to $20.5 billion from $17.4 billion a year ago, in line with analysts' estimates.
"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."
First Published: Apr 19, 2013 11:34 IST