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$MTSC's gross margin for 2Q16 fell by 6.4 percentage points to 32.9% from the previous year quarter. The decline was driven primarily by inefficiencies in execution of complex projects resulting in higher than expected costs, higher indirect labor headcount in the Test business, and increased warranty and medical claims.
No better outlook on $MSFT. Even if the results beat a bit, the stock may move 4 to 6% higher, but won't go above $60.