Microsoft achieves US$60.4bn in sales

18 Jul 2008

Microsoft shares fell 6pc last night on the back of analysts not being impressed with the software giant missed profit expectations, despite it reporting its fastest annual revenue growth since 1999, reaching US$60bn in sales, and earnings per share up 32pc.

Fourth-quarter revenues came in at US$15.8bn, up 18pc on the previous year, and for the full year revenues reached US$60.4bn

Citing “difficult economic conditions” Microsoft said operating income and earnings per share for the year were US$22.4bn and US$1.87 respectively, up 21pc and 32pc. However, earnings per share for the quarter came in at US$0.46 cents, below analyst expectations of 50 cents.

Microsoft said growth rates for operating income and earnings per share were impacted by a US$1.1bn charge in 2007 related to the expansion of warranty coverage for the Xbox 360.

“Delivering US$60bn in annual revenue is an outstanding accomplishment and a testament to the powerful combination of great technology solutions and strong execution by our partners and global sales and marketing teams,” said Kevin Turner (pictured), chief operating officer at Microsoft.

“The outlook for fiscal year 2009 is positive given the breadth of our impressive technology portfolio and the expanding collection of online services we are bringing to market,” Turner said.

Looking ahead to the quarter ended in September, Microsoft predicts revenue to be in the range of US$14.7bn to US$14.9bn and operating income to be in the range of US$5.9bn to US$6bn.

This fiscal year marked the launch of Microsoft’s flagship server products: Windows Server 2008, SQL Server 2008 and Visual Studio 2008. Revenue growth was primarily driven by continued customer demand for all products, including Windows Vista, which has sold over 180 million licences since launch, the 2007 Microsoft Office system, server software and Xbox 360 consoles and games.

“We had a strong finish in the fourth quarter, which capped off an impressive year for the company. We grew revenue 18pc for the year with earnings per share significantly outpacing that,” said Chris Liddell, chief financial officer at Microsoft.

“Looking forward, despite difficult economic conditions, we will build upon the momentum exiting fiscal year 2008 and expect to deliver another year of double-digit revenue and earnings growth in fiscal year 2009.”

By John Kennedy

Pictured: Kevin Turner, chief operating officer at Microsoft

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years