New Microsoft CEO Nadella impresses Wall Street, stresses challenges
SEATTLE (Reuters) - Microsoft Corp's new chief executive on Thursday won rave reviews for his first public encounter with Wall Street analysts who said he communicated willingness to transform the world's largest software company as it scrambles to catch up in the mobile-computing era.
Marking the first time in five years that a Microsoft chief executive joined a quarterly earnings conference call, veteran insider Satya Nadella, who took over the helm on February 4, said his first weeks in the new job were taken up with getting to know the company afresh.
He said he is also dealing with the reality of the new tech marketplace in which Microsoft has ceded its market dominance to Apple Inc and Google Inc.
"It is important and valuable to see the company with the fresh perspective, to get grounded both on our current realities and future opportunities," said Nadella.
"What you can expect of Microsoft is courage in the face of reality; we will approach our future with a challenger mindset; we will be bold in our innovation."
Nadella was helped by a quarterly profit decline that wasn't as bad as feared by many investors, and he got a generally enthusiastic reception from analysts who have warmed to his strategy based on mobile and cloud computing.
"He did a Picasso-like job creating more transparency for Microsoft, as he embarks down this transformational path to the cloud," said Daniel Ives, an analyst at FBR Capital Markets. "He has created enormous goodwill for Microsoft with the street and that speaks to optimism around shares since he took over the reins."
Microsoft stock has crept up 19 percent since longtime Chief Executive Officer Steve Ballmer announced his plan to retire last August and is up 8 percent since Nadella took his place. It was up a further 2.5 percent after-hours on Thursday.
Just by joining the call, Nadella marked a change of approach at the software goliath. Ballmer rarely spoke on the quarterly call, a symbol of his indifferent relationship with Wall Street, which broadly blamed him for Microsoft's lacklustre stock growth for most of the last decade.
"It was a good performance," said Sid Parakh, an analyst at fund firm McAdams Wright Ragen, who listened to Nadella's debut call. "It shows that he has a vision, is well aware of the competitive landscape and is thoroughly knowledgeable of the capabilities within Microsoft."
Al Hilwa, an analyst at tech research firm IDC, said Nadella did a good job establishing rapport: "It was interesting in that if it wasn't for the welcoming greetings by the financial analysts, it sounded like he has been doing it all his life."
Nadella, who has made three major public appearances since taking over, expanded on his theory of focusing on mobile and internet-centric computing, which he says is necessary in what he calls the "mobile-first, cloud-first world".
To back that approach up, Nadella has already introduced Microsoft's hugely popular Office software for Apple's iPad and opted to give away Windows to makers of small-screen mobile devices, moves which show Nadella wants Microsoft's services widely available without being tethered to the Windows operating system.
He did not offer up any more concrete plans in the call on Thursday and answered very broadly when asked if he was strategically reviewing any parts of the company.
"We're all the time reviewing and one of the things that I feel as a leadership team, we have really picked up the pace on asking the hard questions," Nadella said. "I want to be accountable to you all, to our customers, to our partners as a team by executing on our plans."
(Reporting by Bill Rigby; Editing by Cynthia Osterman)
- Tweet this
- Share this
- Digg this
- Libyan militants overrun Benghazi special forces base as chaos deepens
- Carnage at U.N. school as Israel pounds Gaza Strip |
- Moscow fights back after sanctions; battle rages near Ukraine crash site |
- Subdued investment banking hits Barclays profits |
- More violence in China's Xinjiang, prominent academic indicted