Sat, Jan 26, 2013 - Page 15 News List

Microsoft beats forecasts with US$6.4 billion profit


Microsoft Corp on Thursday said its profits dipped slightly from a year earlier, but posted record revenue for the past quarter, getting a lift from sales of its new Windows 8 operating system.

Profits dipped 3.7 percent from 12 months ago to US$6.38 billion, better than most forecasts, while revenues rose 2.7 percent to US$21.46 billion, a record for the US tech giant.

Microsoft said the boost in revenue came from pre-sales and upgrades of Windows 8 recognized in the quarter, and gains in business software and other segments.

However, the second fiscal quarter statement did not offer specific sales data for the firm’s Surface tablet, which was launched late last year ,or its new Windows Phone 8 system, key factors in the company’s future.

“Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers,” chief executive Steve Ballmer said.

“With new Windows devices, including Surface Pro, and the new Office on the horizon, we’ll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need,” he added.

The profit amounted to US$0.76 per share — US$0.01 better than the consensus on Wall Street. Microsoft’s shares traded down 1.4 percent in after-hours exchanges.

John Ogg at 24/7 Wall Street called it a “mixed” report and said there appeared to be concerns that Microsoft did not offer guidance other than that its operating expenses would be in the US$30.3 billion to US$30.9 billion range for the fiscal year.

“Until guidance is offered in the call we would consider this unfinished business,” he said.

Citigroup analyst Walter Pritchard said Microsoft was on target.

“This was the first time in memory we haven’t seen disappointment in the Windows line,” he said in a research note, maintaining a “buy” rating.

Raimo Lenschow at Barclays said the results were “essentially in line with investors’ low expectations.”

The analyst said that Microsoft shares would “pull back only modestly” and that investors will be “looking for further detail on what management expects for Windows 8 moving forward” and sales figures for the Surface tablet.

Microsoft said its Windows division saw revenues jump 24 percent to US$5.88 billion and that over 60 million Windows 8 licenses had been sold to date.

Gains in online services, as well as in server and enterprise software helped offset a decline in the entertainment division which produces the Xbox console and games.

Windows remains the dominant platform for personal computers, but Microsoft has lost ground to Google Inc and Apple Inc over newer devices which use rival operating systems.

The company’s search and online services have struggled, but its Xbox remains the hottest gaming system in the industry.

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