Microsoft Corp beat Wall Street’s expectations with a 51 percent jump in quarterly profit, as higher sales of its flagship Windows and Office software knocked down fears Apple Inc’s iPad would take a bite out of its main business.
The quarterly profit growth was helped by the launch of the latest blockbuster Halo video game, but exaggerated by the deferral of some Windows revenue in the year-ago quarter and flattered by comparison to last year, when the economy was only just emerging from the downturn.
Microsoft’s Windows 7 has sold a record-breaking 240 million copies since its launch a year ago and its Office suite of applications, which debuted this spring, is off to a strong start.
However, its online services division — which contains the Bing search engine and MSN portal — was the weakest point in the company’s quarter, with its loss widening 17 percent to US$560 million. The unit, which is investing heavily in an attempt to catch up with search advertising leader Google and now powers Yahoo Inc Web searches, has lost US$6 billion in the last five years.
However, the company had not seen any adverse effect on sales of computers running Windows due to Apple’s popular iPad tablet device, which is close to selling 8 million units, chief financial officer Peter Klein said.
“We haven’t seen that at all,” Klein said. “Analysts who have done research on it, largely think this [the tablet market] is additive to PC markets as opposed to instead of PCs.”
The world’s largest software company posted a profit of US$5.4 billion, or US$0.62 per share, for the fiscal first quarter ending on Sept. 30, up from US$3.6 billion, or US$0.40 per share, in the year-ago quarter. That beat Wall Street’s average forecast of US$0.55 per share, according to Thomson Reuters I/B/E/S.
Sales rose 25 percent to US$16.2 billion, ahead of analysts’ US$15.8 billion average forecast.
Klein said companies were continuing to buy new computers, maintaining the recovery in tech spending, but consumers were not so strong.
“We feel very good about the business refresh,” Klein said. “On the consumer side, it probably was a little bit less than people had anticipated, but it was still growth.”
As it accepts that it will likely not recapture its go-go growth of the 1990s, Microsoft has recently adopted a keen focus on cost control and profit margins. It cut 5,800 jobs last year and recently told its remaining 89,000 employees they will have to contribute to their healthcare costs for the first time in 2013.
Microsoft stuck to its forecast of US$26.9 billion to US$27.3 billion in operating expenses this fiscal year.
“The company is sticking to its new-found religion on expenses,” said Kim Caughey Forrest, senior analyst at Fort Pitt Capital.
“It used to be ‘Let’s throw everything at it and not care how much it costs.’ That’s great if you’re growing gangbusters, but now we’re seeing growth with margins and that’s what we want to see as investors,” Forrest said.
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast. Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to
RSS