B
Bill Yanaire
Despite signs that businesses are lukewarm to Microsoft's Windows Vista, the
company on Thursday said it achieved record third quarter profits partly on
the strength of sales of the new operating system.
For the three months ended March 31, Microsoft said net income rose 65%
year-over-year to a record $4.93 billion. The profits were driven by $14.4
billion in sales, a 32% increase over the previous year. Earnings per share
jumped 72% to 50 cents.
On average, analysts polled by Thomson Financial expected Microsoft to
report per-share earnings of 46 cents.
Microsoft's third quarter saw the consumer launch of Windows Vista at the
end of January, as well as the release of the Office 2007 productivity
suite. The new products helped drive a 67% increase in sales of the
company's client side offerings to $5.27 billion.
Sales of server products rose 15% to $2.75 billion, while revenue from
online services increased 11% to $623 million -- a modest number that may
provoke some concern in Redmond as Microsoft is trying to match Google's
blockbuster growth in Internet-related business.
Looking ahead, Microsoft said it expects to post fourth quarter revenue in
the range of $13.1 billion to $13.4 billion and earnings per share of 37
cents to 39 cents. For the full fiscal year 2008, the company is forecasting
revenue of between $56.5 billion and $57.5 billion and earnings per share of
$1.68 to $1.72.
Microsoft's overall third quarter sales figures include $1.67 billion in
deferred revenue from a Windows Vista upgrade program that the company
offered prior to Vista's launch.
Despite the strong numbers, signs are emerging that businesses may be slow
to embrace Windows Vista over the long term due to concerns about
application compatibility and hardware requirements. Thirty percent of
businesses surveyed by InformationWeek said they have no plans to upgrade to
the new operating system.
company on Thursday said it achieved record third quarter profits partly on
the strength of sales of the new operating system.
For the three months ended March 31, Microsoft said net income rose 65%
year-over-year to a record $4.93 billion. The profits were driven by $14.4
billion in sales, a 32% increase over the previous year. Earnings per share
jumped 72% to 50 cents.
On average, analysts polled by Thomson Financial expected Microsoft to
report per-share earnings of 46 cents.
Microsoft's third quarter saw the consumer launch of Windows Vista at the
end of January, as well as the release of the Office 2007 productivity
suite. The new products helped drive a 67% increase in sales of the
company's client side offerings to $5.27 billion.
Sales of server products rose 15% to $2.75 billion, while revenue from
online services increased 11% to $623 million -- a modest number that may
provoke some concern in Redmond as Microsoft is trying to match Google's
blockbuster growth in Internet-related business.
Looking ahead, Microsoft said it expects to post fourth quarter revenue in
the range of $13.1 billion to $13.4 billion and earnings per share of 37
cents to 39 cents. For the full fiscal year 2008, the company is forecasting
revenue of between $56.5 billion and $57.5 billion and earnings per share of
$1.68 to $1.72.
Microsoft's overall third quarter sales figures include $1.67 billion in
deferred revenue from a Windows Vista upgrade program that the company
offered prior to Vista's launch.
Despite the strong numbers, signs are emerging that businesses may be slow
to embrace Windows Vista over the long term due to concerns about
application compatibility and hardware requirements. Thirty percent of
businesses surveyed by InformationWeek said they have no plans to upgrade to
the new operating system.