Microsoft Corporation (NASDAQ:MSFT) has been downgraded by analysts at McAdams Wright Ragen. They said their downgrade is because the company’s third quarter trends are unchanged from recent quarters. The analysts do say that the company’s enterprise product sales show stable growth. They also said Microsoft’s cloud-related products seem to be gaining momentum. However, the company’s recent quarterly results show that the PC market is continuing to weaken.
In a report issued to investors this week, analysts at McAdams Wright Ragen said Microsoft Corporation (NASDAQ:MSFT)’s latest report also showed “better expense management.” Nonetheless, they lowered their fiscal year 2013 revenue estimates from $80.3 billion to $78.6 billion and their earnings per share from $3.07 to $2.90.
The analysts said they reduced their estimates because of lower expectations for the adoption of Windows 8 tablets. They also lowered their revenue estimates for Microsoft’s Server and Tools and Microsoft Business Division because of “ongoing macroeconomic uncertainty” and also the company’s transition toward more multi-year licensing and subscription revenues.
Even though they’re downgrading Microsoft Corporation (NASDAQ:MSFT) right now, they said they remain upbeat on the company in the long-term. They kept their $34 per share price target, but they said Microsoft Corporation (NASDAQ:MSFT) must demonstrate that it’s able to remain relevant in the mobile computing space. They’re optimistic that Microsoft can make progress in the long run, but they’re concerned the ecosystem may shift to other platforms if it can’t establish itself in the mobile space. In their view, new touch-enabled devices, possibly during the second half of the year, could spur Windows 8 demand.
They see Microsoft Corporation (NASDAQ:MSFT) as being “uniquely positioned to deliver hybrid cloud services,” especially because of its long history in the enterprise sector. They predict the company will continue to make traction in this area, although they are still concerned about the Windows 8 ecosystem.
As of the moment of this writing, shares of Microsoft Corporation (NASDAQ:MSFT) were down .72 percent.
