Microsoft Corporation (MSFT) Continues to Underperform, but for How Long?

Financial and Market Performance

Microsoft’s financial performance has not been impressive in the recent past. In the fourth quarter of 2012, the company’s revenue increased to $21.6 billion from $20.9 billion in the same quarter of 2011. However, the net profit of the company declined to $6.38 billion from $6.62 billion. The hike in the company’s revenue can be directly attributed to the launch of Windows 8 and associated devices; however, the rise in revenue is not as significant as was expected, therefore causing a decline in net profit. The following chart represents the financial performance of the company for the past five quarters:

Bottom Line

It can be observed from the chart that Microsoft’s market performance has been highly volatile over the past year and the average trend has been downwards. There is a high level of uncertainty regarding the prospective market performance of the company. Therefore, in my opinion, investors should hold their investments in Microsoft. If the company’s forecasts are accurate, its financial performance might soon improve creating a positive impact on its share price.

The article The Windows Maker Continues to Underperform, but for How Long? originally appeared on Fool.com and is written by Muhammad Bazil.

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