Microsoft jumps on buyback plan
Company will repurchase $20 billion worth of shares by Aug. 17. Quarterly results weak but slightly ahead of forecasts.
By Amanda Cantrell, CNNMoney.com
July 20 2006: 4:38 PM EDT
NEW YORK (CNNMoney.com) -- Microsoft's quarterly profit fell by 24 percent, but the company reported revenues that beat expectations and announced a $40 billion share buyback program, sending shares higher in after-hours trading.
Microsoft (Charts) reported net income of $2.83 billion, or 28 cents a share, including three cents for legal charges. Excluding the charges, earnings per share were 31 cents, a penny ahead of Wall Street analysts' expectations.
The company also announced a plan to buy back $20 billion worth of shares by Aug. 17 and authorized the purchase of $20 billion more through June 2011.
Shares gained six percent in after-hours trading. In the year-ago quarter, Microsoft reported net income of $3.70 billion, or 34 cents a share, including legal charges and tax benefits.
Microsoft reported sales of $11.8 billion, a 16 percent increase over the year-ago quarter and ahead of analysts' expectations of $11.6 billion.