Microsoft reported a fiscal third-quarter profit of $4.01 billion, or 45 cents per share, on revenue of $14.5 billion. Net profit was up 35 percent while revenue was up 6.3 percent compared to the same period a year earlier. The growth is attributed to strong sales of Windows 7 to business customers, and the results are better than Wall Street analyst expectations of earnings of 42 cents per share on revenue of $14.4 billion.
While Microsoft's Windows division posted impressive double-digit growth rates, revenues from both the business division and the server and tools division rose only 2 percent, and the online division performed really bad, as revenue rose 12 percent but losses spiked 75 percent to $713 million.
Despite beating expectations, Microsoft's shares have plunged 3.12 percent to $30.41 in after-hours trading.
As expected, higher revenues and profits from the Windows division accounted for all of the advances reported by the company overall from a year before. The division’s revenues rose 28 per cent to $4.4bn, while operating income climbed 35 per cent to $3.1bn.
By contrast, the revenues from both the business division and the server and tools division rose only 2 per cent. Microsoft is counting on a new launch of its Office productivity software next month, coinciding with an anticipated revival of business spending later this year, to prompt its next leg of growth.
Losses rose sharply in Microsoft’s online businesses, meanwhile, as they continued to invest heavily to try to kick-start a division that has continued to lag. Revenues rose 12 per cent to $566m, though losses jumped 73 per cent to $713m.