Microsoft Corp reported record fourth-quarter revenue on Thursday, helped by strong sales of its Office software suite. However, investors still seem concerned about the world’s largest software maker’s growth prospects as consumers buy fewer computers that run its Windows software.
While all of the company’s other business units posted growth in the period from April to last month, revenue from the division that includes Microsoft’s Windows operating system fell 1 percent from the same time last year — its third consecutive quarter of decline.
Besides indicating that consumers are buying fewer computers that use Windows, it may signify that more consumers are moving to tablet computers instead of upgrading their existing laptop and desktop computers.
Total revenue for the fiscal fourth quarter rose 8 percent from last year to US$17.4 billion, higher than the US$17.2 billion that analysts polled by FactSet expected.
Redmond, Washington-based Microsoft earned US$5.87 billion, or US$0.69 per share, during the quarter, compared with US$4.52 billion, or US$0.51 per share, a year ago. Analysts polled by FactSet expected a profit of US$0.59 per share.
Growing Office sales helped revenue from the company’s largest division climb nearly 8 percent to US$5.78 billion. Microsoft said its results were also aided by higher software and server sales to businesses and the popularity of its Xbox 360 video game console and Kinect motion-sensing game control device.
However, sales in the company’s Windows and Windows Live division were soft, dipping to US$4.74 billion from US$4.78 billion. Microsoft said it would have grown were it not for the launch of Windows 7 a year ago, which made comparisons more difficult this year.
Recent signs have worried investors.
Intel on Wednesday cut its forecast for PC unit growth this year to 8 percent to 10 percent over last year. The Santa Clara, California-based company earlier predicted low-double-digit percentage growth.
Last week, market research firms IDC and Gartner reported that PC shipments worldwide are growing slower than expected, with the US and European markets even contracting.
Investors have also been focused on this segment of the business amid concern that the increasing popularity of tablets like Apple Inc’s iPad are cutting into sales of computers that use Microsoft’s operating software. Apple reported earlier this week that iPad sales nearly doubled year-on-year to 9.25 million.
The iPad’s success prodded Microsoft to develop an operating system that can run on tablets, dubbed Windows 8, but that is not expected to hit the market until next year.
Meanwhile, Advanced Micro Devices Inc (AMD) earned US$61 million, or US$0.08 per share, in the three months ended July 2, -comparing with a loss of US$43 million, or US$0.06 per share, a year ago, showing early signs of success for a new chip that combines general-purpose and graphics capabilities.
AMD sold more than 7 million of the “accelerated processing units” in the second quarter, more than half of the total since they went on sale in November. Revenue fell slightly short at US$1.57 billion. Analysts expected US$1.58 billion, according to FactSet.
AMD’s third-quarter forecast calls for a sequential increase in revenue of 8 percent to 12 percent. That translates to US$1.70 billion to US$1.76 billion, in line with analyst forecasts for US$1.71 billion.
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