Microsoft profits fall, but still beat forecasts


23 Oct 2009

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Microsoft has reported an 18pc fall in first-quarter profit, but revenue at the US tech giant do not disappoint.

The bellwether firm reported earnings for the quarter ended 30 September of US$3.57 billion, or US$0.40 cents a share, down from the US $4.37 billion, or US$0.48 cents a share it earned in the same period a year earlier.

Although revenue fell 14pc to US$12.92 billion it still surpassed expectation. Analysts polled by Thomson Reuters had expected earnings of US$0.32 cents on revenue of US$12.37 billion.

Microsoft profit fall has to be taken in the context of the deferral of US$1.47 billion in revenue from its sale of the new Windows 7 operating system, which adds up to an impact of US$0.12 on the company’s earnings per share for the quarter.

If this sum is included in the first-quarter figures, revenue earned would total US$14.39 billion, representing a 4pc year-over-year decline, with earnings per share totalling US$0.52 per share, an increase of pc over the same period in 2008.

"We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” said Chris Liddell, chief financial officer at Microsoft.

“We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions."

“The worldwide launches of Windows 7, Exchange Server 2010 and Windows Server 2008 R2 are exciting milestones for Microsoft, our partners, and customers,” said Kevin Turner, chief operating officer at Microsoft.

“We are pleased by the early positive response we are receiving for these products,” he added.

Microsoft also cut its full-year guidance for operating expenses by US$400 million to between US$26.2 billion and US$26.5 billion.

Article courtesy of businessandleadership.com