Windows sales boost Microsoft earnings
(CBS/AP) REDMOND, Wash. — Microsoft Corp.'s (MSFT) fared better than analysts anticipated in its latest quarter, boosted by a surprising rise in sales of its Windows operating system.
The fiscal third-quarter performance announced Thursday comes as investors look forward to the release of Windows 8 later this year. The next version marks the most radical overhaul of the widely-used operating system in decades.
Microsoft Corp. earned $5.1 billion, or 60 cents per share, during the three months ending in March. That was down from net income of $5.2 billion, or 61 cents per share, a year ago.
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Last year's results were boosted by a $461 million tax benefit.
Revenue rose 6 percent from last year to $17.4 billion.
Analysts had anticipated earnings of 58 cents per share on revenue of $17.2 billion, according to a FactSet survey.
"We're driving toward exciting launches across the entire company, while delivering strong financial results," said Microsoft CEO Steve Ballmer.
One of the quarter's bright spots came in Microsoft's Windows division, which has faltered in the past year as more people bought Apple Inc.'s iPad and other tablet computers instead of desktop and notebook computers. Analysts also have assumed that many businesses and consumers thinking about buying a PC would hold off until Windows 8 hits the market in the fall.
That didn't turn out to be the case during the three months ending in March as revenue in the Windows division edged up by 4 percent from last year to $4.6 billion. Microsoft attributed the gain to an uptick in businesses who bought licenses for Windows 7. It marked only the second time in the past six quarters that Microsoft has registered a year-over-year gain in the Windows division.
On the flip side, Microsoft's entertainment division sagged in the past quarter as demand weakened for its Xbox video game console. The division's revenue fell 16 percent from last year to $1.6 billion.
Microsoft's long-suffering online division, which has struggled for years to compete against Internet search leader Google Inc., managed to narrow its losses in the latest quarter. The division's operating loss of $479 million compared to a loss of $776 million at the same time last year.
Microsoft shares added 90 cents, or nearly 3 percent, to $31.91 in Thursday's extended trading.