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Microsoft plans 40-billion-dollar share buyback; profits fall
Jul 21, 2006, 0:36 GMT
New York - Microsoft Corp profits plunged 24 per cent in the fourth fiscal quarter, but the software firm surprised investors by announcing a plan to buy back 40 billion dollars in shares from investors, in a statement Thursday.
Net income fell to 2.83 billion dollars from 3.7 billion dollars a year earlier, though revenue climbed 16 per cent to a record 11.8 billion dollars in the quarter.
The Redmond, Washington-based company said it will repurchase shares in two different programmes of 20 billion dollars each, also announcing the completion of a previous buy back of 30 billion dollars.
The new buy back offer supports 'our confidence and optimism in the long term future of the company and continue to execute on our strategy of returning capital to shareholders,' Chief Financial Officer Chris Liddell said.
The move, announced after the stock market closed, was welcomed by investors who sent the stock soaring 5.6 per cent to 24.13 dollars, in after-hours trading on Thursday.
Microsoft's profits dropped after it spent more money on shipping Xbox video-game consoles, in an attempt to take advantage of a delay in the release of Sony Corp's newest Playstation, Bloomberg reported.
© 2006 dpa - Deutsche Presse-AgenturCOMMENT
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