Microsoft quarterly results top expectations

COMMENTARY

LAURA DIDIO, ANALYST, ITIC

"If you have a wounded animal and you corner it, that is when it is at its most dangerous. Microsoft knows that its core businesses are under siege from competitors as powerful as they are -- IBM Google, Apple and others. They can swing into action when they have to. They have considerable resources to bring to the table."

LAXMI PORURI, FOUNDING PARTNER, PRIMARY GLOBAL RESEARCH

"Probably the PC picked up because of what Intel said that the fourth quarter and going forward is slightly up from what was previously forecast. They're seeing not a recovery, but a little bit of a turnaround.

"They're going to be well positioned to take some share away on the server side and as well on the content management side.

"We think Oracle reported a disappointing quarter recently largely because they're going to be struggling with their acquisitions a bit in terms of how they're going to integrate some of their technologies. So we think Microsoft has a pretty good opportunity going forward in the next 12 to 18 months to take some share away on that end."

RICHARD WILLIAMS, ANALYST, CROSS RESEARCH

"This was stronger than we anticipated. Gross margin improved, operating margin was a little weaker than anticipated, but the strength seems to have come from server tools. And online was a little bit better. Entertainment was a lot better.

"As for the stock today, we've seen it: It jumped a lot.

"I think Windows 7 will be more popular than has been generally expected. I think it will kick in faster than Vista or XP, but having said that it will be the March quarter before we see it."

KATHERINE EGBERT, ANALYST, JEFFERIES & CO

"Microsoft is back. They are able to succeed despite heightened competition from Apple's share gain and Google's great brand.

"The numbers were unbelievable. An absolutely blowout. Crazy good."

"Every division is solid, including Windows, which is where people thought there would be some slowdown ahead of the Windows 7 upgrade cycle.

"There is a lot of PC buying going on.

"The most upside was probably in the entertainment area, which is Xbox. There was about $300 million in upside.

"In cost controls they reported a really good operating margin and they guided down their op-ex for the year."

BENNETT GAEGER, MANAGING DIRECTOR OF LISTED EQUITY TRADING, STIFEL NICOLAUS CAPITAL MARKETS