Microsoft sees 60% jump in earnings
By Bill Rigby |
January 30, 2010, Saturday
|
Print Edition
Print Edition
MICROSOFT Corp posted a bigger-than-expected 60 percent jump in quarterly profit, helped by strong sales of Windows 7, and said it expected business technology spending to recover this year.
The world's biggest software maker said on Thursday that net profit came to US$6.7 billion, or 74 cents per share, for its fiscal second quarter, versus US$4.2 billion, or 47 cents per share, a year ago.
Analysts were expecting 59 cents per share, according to Thomson Reuters.
"Make no mistake, these were very good results out of Microsoft. Expectations were heightened the last few weeks, given Q4 PC shipments and good numbers from Intel," said Andy Miedler, analyst at Edward Jones.
Others also pointed to confusion over the earnings numbers because Microsoft included the effects of deferred revenue from pre-sales of Windows 7 to PC makers and retailers, and its free upgrade program.
Excluding that revenue, profit was 60 cents per share.
"It was a pretty clean, blowout beat," said Sid Parakh, an analyst at McAdams Wright Ragen.
"All the (Wall) Street models should have reflected that deferred revenue because it's not a surprise."
Microsoft stopped making specific profit or revenue forecasts in January 2009, citing market volatility.
"We didn't see enterprise spending growth in our fiscal second quarter just ended," Chief Financial Officer Peter Klein told Reuters.
"However, our general view is a recovery will occur starting this calendar year and gradually over the next several years," he added.
Microsoft's revenue rose 14 percent to US$19.02 billion, including US$1.71 billion of deferred revenue from the Windows 7 launch in October. Excluding that, sales were US$17.31 billion.
The world's biggest software maker said on Thursday that net profit came to US$6.7 billion, or 74 cents per share, for its fiscal second quarter, versus US$4.2 billion, or 47 cents per share, a year ago.
Analysts were expecting 59 cents per share, according to Thomson Reuters.
"Make no mistake, these were very good results out of Microsoft. Expectations were heightened the last few weeks, given Q4 PC shipments and good numbers from Intel," said Andy Miedler, analyst at Edward Jones.
Others also pointed to confusion over the earnings numbers because Microsoft included the effects of deferred revenue from pre-sales of Windows 7 to PC makers and retailers, and its free upgrade program.
Excluding that revenue, profit was 60 cents per share.
"It was a pretty clean, blowout beat," said Sid Parakh, an analyst at McAdams Wright Ragen.
"All the (Wall) Street models should have reflected that deferred revenue because it's not a surprise."
Microsoft stopped making specific profit or revenue forecasts in January 2009, citing market volatility.
"We didn't see enterprise spending growth in our fiscal second quarter just ended," Chief Financial Officer Peter Klein told Reuters.
"However, our general view is a recovery will occur starting this calendar year and gradually over the next several years," he added.
Microsoft's revenue rose 14 percent to US$19.02 billion, including US$1.71 billion of deferred revenue from the Windows 7 launch in October. Excluding that, sales were US$17.31 billion.
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