US software giant Microsoft posted a more than 30 percent rise in quarterly net profit on Thursday, but pocketed less than gadget-maker Apple for the first time in two decades.
Microsoft said net profit increased 31 percent to US$5.23 billion in the third quarter of its fiscal year while revenue rose 13 percent to US$16.43 billion in what the company called a “mixed” market for personal computers.
Earnings per share of US$0.61 were better than the US$0.56 forecast by Wall Street analysts.
Apple reported quarterly net profit of US$5.99 billion last week on revenue of US$24.67 billion — the first time it has posted a higher net profit than the Redmond, Washington-based Microsoft since March 1991.
In May of last year, Apple, maker of the Macintosh computer, the iPod, iPhone and iPad, dethroned Microsoft as the largest US technology company in terms of market capitalization.
Microsoft said Windows 7 was the fastest selling operating system in history with 350 million licenses sold although revenue for the segment was down 4 percent in the quarter to US$4.4 billion, in line with PC trends.
“We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses,” Microsoft chief financial officer Peter Klein said in a statement.
“Consumers are purchasing -Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications,” Klein said.
Microsoft general manager for investor relations Bill Koefoed said in a conference call with financial analysts that business PC growth was 9 percent in the quarter.
“The business PC refresh cycle continues and is still in the early stages,” Koefoed said, adding that emerging markets now represent nearly half of all worldwide PC shipments.
He said the consumer PC market declined 8 percent in the quarter and cited several factors, “including a 40 percent decline in netbooks, broader consumer macroeconomics, increased competition for consumer spending and the strength of Windows 7 consumer PCs in the prior year.”
“In total, we estimate the PC market declined 1 to 3 percent,” Koefoed said.
A number of industry analysts have attributed part of the weakness in PC sales to new touchscreen tablet computers, particularly Apple’s iPad, and a growing market segment where Microsoft has yet to make a mark.
Koefoed and Klein also cited problems with monetization of the Internet search partnership Microsoft has entered into with Yahoo in a bid to take on market leader Google.
“We are partnering closely with Yahoo to improve monetization as quickly and efficiently as possible,” Klein said.
Koefoed said “the expected monetization of the combined Yahoo and Bing search marketplace in the US and Canada is taking longer than planned and revenue per share remains below our expectations.”
Consequently, he said, “we have delayed international integration efforts to focus on improvements in the US and Canada.”
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