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Microsoft 3rd quarter profit rises, helped by Vista sales
9:09 p.m. 04/26/2007 Provided By AP Worldstream
SEATTLE, Apr 27, 2007 (AP Worldstream via COMTEX) -- Microsoft Corp.'s
fiscal third-quarter profit jumped 65 percent, buoyed by sales of its new
versions of Windows and Office and by upgrade coupons for the operating
system issued over the holidays.
Earnings for the quarter ended March 31 rose to $4.93 billion (EUR 3.63
billion), or 50 cents per share, from $2.98 billion, or 29 cents per share
in same period last year, the company said Thursday.
Results included legal charges amounting to 1 cent per share, but tax
benefits boosted profit by 2 cents per share.
Analysts surveyed by Thomson Financial forecast a profit of 46 cents per
share.
Revenue for the quarter rose 32 percent to $14.4 billion (EUR 10.59
billion). Wall Street was looking for $13.89 billion (EUR 10.22 billion) in
sales.
Microsoft started selling its newest operating system, Windows Vista, to
consumers at the end of January. Its "client" division, responsible for
Windows, brought in $5.27 billion (EUR 3.88 billion) in sales, 67 percent
higher than a year ago.
Microsoft said it deferred $1.2 billion (EUR 880 million) in Windows Vista
revenue to the third quarter, to account for upgrade coupons given to PC
buyers during the holiday season before the consumer launch of the new
operating system. Excluding this figure, client revenue totaled $4.1 billion
(EUR 3.02 billion), 30 percent higher than last year.
Business division revenue, which includes sales of Office 2007, rose 34
percent to $4.83 billion (EUR 3.55 billion).
Microsoft Chief Financial Officer Chris Liddell said the "excellent quarter"
was due to better-than-expected sales of Vista and Office.
Liddell said Vista beat internal forecasts by $300 million (EUR 220.65
million) to $400 million (EUR 294.2 million), and Office 2007 sales were
$200 million (EUR 147.1 million) better than expected.
The client division sales "are surprisingly ahead of where we thought they
would come in," said Sid Parakh, an analyst at McAdams Wright Ragen. "They
might indicate Vista is doing fine."
Microsoft's entertainment and devices division, which includes the Xbox 360
game console and the Zune music player, posted a 21 percent sales drop to
$929 million (EUR 683.29 million) in an expected post-holiday slump.
Liddell said the company is still on track to sell 1 million Zunes this
fiscal year, and reach the 12 million mark in Xbox 360 units sold since the
product hit store shelves in November 2005.
Microsoft trails Google Inc. and Yahoo Inc. in making money from Web
searches, but online services revenue edged up 11 percent to $623 million
(EUR 458 million) in the quarter. Online advertising revenue grew 23 percent
year-over-year, and Liddell said "revenue per search" is higher than a year
ago, when the company was still using a third-party ad platform.
"Monetization of search is increasing with our new adCenter platform," said
the CFO. "It's still a small base, but it's growing very well."
Microsoft also said it repurchased more than $6.7 billion (EUR 4.93 billion)
in stock during the quarter.
For the fiscal fourth quarter, which ends June 30, Microsoft said it will
earn 37 cents to 39 cents per share, with revenue of $13.1 billion (EUR 9.64
billion) to $13.4 billion (EUR 9.86 billion). Wall Street currently expects
a profit of 40 cents per share on $13.31 billion (EUR 9.79 billion) in
sales.
For the full 2007 fiscal year, the company raised its guidance, forecasting
a profit of $1.48 to $1.50 per share on sales from $50.9 billion (EUR 37.44
billion) to $51.2 billion (EUR 37.66 billion). Analysts are looking for
$1.47 per share on revenue of $50.56 billion (EUR 37.19 billion).
Microsoft forecast earnings of $1.68 to $1.72 per share for fiscal 2008,
with revenue of $56.5 billion (EUR 41.56 billion) to $57.5 billion (EUR
42.29 billion). Analysts are predicting a profit of $1.69 per share on
$56.24 billion (EUR 41.37 billion) in sales.
"I think it's a very good quarter, but more importantly, guidance is
essentially in line with what the Street is expecting," said Sarah Friar, an
analyst at Goldman Sachs. "Everyone was so terrified guidance would have
some sort of issue."
Shares of Microsoft jumped $1.20, or 4.1 percent, to $30.30 in after-hours
electronic trading, after adding 11 cents to close at $29.10 on the Nasdaq
Stock Market.
Copyright (C) 2007 The Associated Press. All rights reserved.
Microsoft 3rd quarter profit rises, helped by Vista sales
9:09 p.m. 04/26/2007 Provided By AP Worldstream
SEATTLE, Apr 27, 2007 (AP Worldstream via COMTEX) -- Microsoft Corp.'s
fiscal third-quarter profit jumped 65 percent, buoyed by sales of its new
versions of Windows and Office and by upgrade coupons for the operating
system issued over the holidays.
Earnings for the quarter ended March 31 rose to $4.93 billion (EUR 3.63
billion), or 50 cents per share, from $2.98 billion, or 29 cents per share
in same period last year, the company said Thursday.
Results included legal charges amounting to 1 cent per share, but tax
benefits boosted profit by 2 cents per share.
Analysts surveyed by Thomson Financial forecast a profit of 46 cents per
share.
Revenue for the quarter rose 32 percent to $14.4 billion (EUR 10.59
billion). Wall Street was looking for $13.89 billion (EUR 10.22 billion) in
sales.
Microsoft started selling its newest operating system, Windows Vista, to
consumers at the end of January. Its "client" division, responsible for
Windows, brought in $5.27 billion (EUR 3.88 billion) in sales, 67 percent
higher than a year ago.
Microsoft said it deferred $1.2 billion (EUR 880 million) in Windows Vista
revenue to the third quarter, to account for upgrade coupons given to PC
buyers during the holiday season before the consumer launch of the new
operating system. Excluding this figure, client revenue totaled $4.1 billion
(EUR 3.02 billion), 30 percent higher than last year.
Business division revenue, which includes sales of Office 2007, rose 34
percent to $4.83 billion (EUR 3.55 billion).
Microsoft Chief Financial Officer Chris Liddell said the "excellent quarter"
was due to better-than-expected sales of Vista and Office.
Liddell said Vista beat internal forecasts by $300 million (EUR 220.65
million) to $400 million (EUR 294.2 million), and Office 2007 sales were
$200 million (EUR 147.1 million) better than expected.
The client division sales "are surprisingly ahead of where we thought they
would come in," said Sid Parakh, an analyst at McAdams Wright Ragen. "They
might indicate Vista is doing fine."
Microsoft's entertainment and devices division, which includes the Xbox 360
game console and the Zune music player, posted a 21 percent sales drop to
$929 million (EUR 683.29 million) in an expected post-holiday slump.
Liddell said the company is still on track to sell 1 million Zunes this
fiscal year, and reach the 12 million mark in Xbox 360 units sold since the
product hit store shelves in November 2005.
Microsoft trails Google Inc. and Yahoo Inc. in making money from Web
searches, but online services revenue edged up 11 percent to $623 million
(EUR 458 million) in the quarter. Online advertising revenue grew 23 percent
year-over-year, and Liddell said "revenue per search" is higher than a year
ago, when the company was still using a third-party ad platform.
"Monetization of search is increasing with our new adCenter platform," said
the CFO. "It's still a small base, but it's growing very well."
Microsoft also said it repurchased more than $6.7 billion (EUR 4.93 billion)
in stock during the quarter.
For the fiscal fourth quarter, which ends June 30, Microsoft said it will
earn 37 cents to 39 cents per share, with revenue of $13.1 billion (EUR 9.64
billion) to $13.4 billion (EUR 9.86 billion). Wall Street currently expects
a profit of 40 cents per share on $13.31 billion (EUR 9.79 billion) in
sales.
For the full 2007 fiscal year, the company raised its guidance, forecasting
a profit of $1.48 to $1.50 per share on sales from $50.9 billion (EUR 37.44
billion) to $51.2 billion (EUR 37.66 billion). Analysts are looking for
$1.47 per share on revenue of $50.56 billion (EUR 37.19 billion).
Microsoft forecast earnings of $1.68 to $1.72 per share for fiscal 2008,
with revenue of $56.5 billion (EUR 41.56 billion) to $57.5 billion (EUR
42.29 billion). Analysts are predicting a profit of $1.69 per share on
$56.24 billion (EUR 41.37 billion) in sales.
"I think it's a very good quarter, but more importantly, guidance is
essentially in line with what the Street is expecting," said Sarah Friar, an
analyst at Goldman Sachs. "Everyone was so terrified guidance would have
some sort of issue."
Shares of Microsoft jumped $1.20, or 4.1 percent, to $30.30 in after-hours
electronic trading, after adding 11 cents to close at $29.10 on the Nasdaq
Stock Market.
Copyright (C) 2007 The Associated Press. All rights reserved.
