Tech Industry

Warning impacts Microsoft stock

The software giant's stock dips after it warns that it is "likely to experience slower growth" for the remainder of the year.

Microsoft stock dipped in today's trading, after the company warned that it is "likely to experience slower growth" for the remainder of the year.

After a strong run that pushed the company's stock to a staggering all-time high and close to passing a $100 per share barrier, the stock slipped back 4.38 points in trading today.

The stock dropped to 94.5 a share, down from yesterday's near-record close of 98-7/8. The stock has gained more than 50 percent since the New Year, when it traded down around 65 per share.

Microsoft's early slip brought down the tech-heavy Nasdaq as well. The Nasdaq dropped to 1881.4, down 36.21 points from yesterday's close of 1917.6.

Analysts, however, maintained their recommendations for the stock, despite the cautious outlook by the company. Microsoft was reiterated a "strong buy" by Cowen & Company and was held at a "buy" rating by Salomon Smith Barney.

Yesterday the software giant reported earnings that beat analyst expectations, but said that its revenue growth had slowed to its lowest level since 1996. Revenue totaled $3.8 billion, up just 18 percent from the $3.2 billion reported in the same quarter a year ago.

Earnings topped expectations with profits of 50 cents a share. Analysts had pegged the company at earnings of 48 cents per share, according to First Call.

"It is critical to note that our growth has slowed for each of the last four quarters, and we are likely to experience slower growth for the balance of calendar 1998," Greg Maffei, chief financial officer, said in a statement.

The company added that its fundamentals continued to be strong across most geographic areas, especially in North America with the adoption of Office 97, but said it remains concerned about business in the Far East.