Microsoft beats expectations

Microsoft has handily beaten expectations for its first quarter reporting earnings per share of 56 cents, a 55% rise from the same quarter a year ago. While net earnings totalled $US1.52 billion, Microsoft revenue for the quarter, ended September 30, was $3.95 billion, compared to revenue of $3.13 billion and earnings of $959 million, or 36 cents per share, for the same period last year.

Microsoft has handily beaten expectations for its first quarter reporting earnings per share of 56 cents, a 55% rise from the same quarter a year ago.

While net earnings totalled $US1.52 billion, Microsoft revenue for the quarter, ended Sept. 30, was $3.95 billion, compared to revenue of $3.13 billion and earnings of $959 million, or 36 cents per share, for the same period last year.

Microsoft was predicted to see 49 cent earnings per share for its first quarter, according to analysts polled by First Call.

Microsoft's sale of a company during the most recent quarter and purchase of another company during the same quarter last year impacted earnings both quarters. Earnings for the first-quarter quarter this year reached $1.68 billion including the $160 million one-time gain on the sale of Softimage Inc. Meanwhile, earnings for the first-quarter a year ago were $663 million including a $296 million write-off of acquired in-process technology related to the purchase of WebTV Networks.

Executives attributed its earnings rise in the most recent quarter to strong demand for Windows 98 in Japan and Europe and strong sales of Windows NT Workstation, although it said revenue growth for Office 97 has slowed.

Since Windows 98 was launched June 25 more than 10 million customers have bought either a Windows 98 retail upgrade or a new Windows 98-based PC, according to the company.

Geographically, sales in the Americas and South Pacific region were highest reaching revenue of $1.442 billion, up 29 %; followed by revenue of $839 million, up 23%, in Europe, the Middle East and Africa; and revenue of $307 million, a drop from the previous $345 million, in the Asia region.

Specifically, sales in Australia and Brazil were high although there are economic challenges in Latin American countries, Greg Maffei, chief financial officer, said in a conference call. In Asia, while financial and political uncertainties continue to threaten results in Japan, revenue increased year-over-year in Taiwan, Hong Kong and India, he added.

Noting that many other technology companies have beaten estimates this quarter, Maffei said the company was not worried about the future.

"While we are characteristically cautious about the period ahead," he said, "the current results from Microsoft do not suggest an economic meltdown."

In the original equipment manufacturer channel, sales to PC makers were strong, up 39% to $1.365 billion.

According to product groups, revenues rose 38 percent in operating systems and 21 percent in desktop and server applications and development tools, but were flat in the online services, learning and entertainment and hardware group.

Looking ahead, revenue for the second quarter should be up by 22 percent over the second quarter a year ago, said Maffei.

Microsoft stock was down 2.69 to close at $100.25 on Nasdaq today. The quarterly results were released after the market closed.

Microsoft, based in Redmond, Washington, can be reached on the World Wide Web at http://www.microsoft.com/.

Join the newsletter!

Error: Please check your email address.
Show Comments

Market Place

[]