Microsoft reported strong quarterly sales and profit growth on Thursday, surprising Wall Street analysts with the sales of its core software products.
The world's largest software maker continues to trail well behind Google in the new markets for Internet services and online advertising. But the new versions of its lucrative personal computer businesses -- the Windows Vista operating system and Microsoft Office 2007 -- appear to be selling better than analysts expected.
Microsoft, which reported its results after regular trading on the stock market closed, raised its financial forecasts for the current quarter and its fiscal year, which will end next June.
PHOTO: AP
In after-hours trading, Microsoft shares jumped nearly 12 percent to US$35.76 a share. In the regular trading session, the company's shares closed at US$32.01, up US$0.76 for the day.
For its first quarter, Microsoft reported net profits of US$4.29 billion, or US$0.45 a share, up 23 percent from a year earlier. Analysts had predicted US$0.39 a share.
Microsoft reported revenue of US$13.76 billion, an increase of 27 percent from a year earlier. The consensus revenue estimate of securities analysts, compiled by Thomson Financial, was just under US$12.6 billion.
In an interview, Microsoft chief financial officer Christopher Liddell said the company had "outperformed expectations pretty much across the board," led by the performance of its personal computer software products. Sales in the Windows group rose 25 percent to more than US$4.14 billion, while the Office division reported a 20 percent increase in sales to US$4.11 billion.
Liddell cited three factors for the exceptionally strong performance of the desktop products. The sales of personal computers worldwide grew 14 percent to 16 percent, he said, compared with the company's anticipated range of 10 percent to 12 percent. Growth was highest, he added, in consumer and international markets, especially in developing economies like China, India, Russia and Brazil.
Microsoft also sold more of its premium-priced versions of Windows and Office than a year earlier. Liddell also said the company's efforts to combat piracy were particularly successful, increasing sales of some product lines by as much as 5 percent from a year earlier.
"It's only one quarter, so we're not getting carried away here," Liddell said. "But the anti-piracy really helped."
Microsoft got another solid quarter from its server software group, which in recent years has become the company's third big, profitable business alongside Windows and Office. Server products are the back-end software in corporate data centers that run e-mail systems, databases and corporate applications. Server software sales for the quarter rose 16 percent to US$2.9 billion.
Microsoft's sales also got a healthy lift from its entertainment and devices unit, helped by the introduction of the hit video game Halo 3. Revenue from the entertainment and devices group rose 90 percent to US$1.9 billion. And after years of losses, the unit reported a pretax profit of US$165 million, compared with a loss of US$142 million a year earlier.
The mainstay businesses are thriving, but analysts say future growth will increasingly depend on how well Microsoft can do in selling online advertising and developing Internet services. This model of delivering software, information and entertainment over the Internet to personal computers, cellphones and other devices, sent from huge data centers, is often called "cloud computing." Google, the search giant, is the runaway early leader.
"Strategically, looking forward, the challenge for Microsoft is cloud computing and Google," said David Mitchell Smith, an analyst at the research company Gartner.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS