Microsoft revenue up, but profits down for Q4

Microsoft revenue was up for its fiscal 2006 fourth quarter, but profit was down due to expenses and legal charges.

Strong sales of the Xbox 360 and SQL Server 2005 helped Microsoft end its fiscal year on a bit of a high note, though income was down due to expenses and legal charges.

For its fiscal fourth quarter, which ended June 30, Microsoft reported revenue of US$11.8 billion (NZ$18.97 billion), which beat Wall Street expectations of $11.6 billion and was a 16% increase over the year-ago figure.

However, Microsoft's net income for the quarter, which ended June 30, was down 24% over the previous year. The company reported net income of $2.83 billion and earnings per share (EPS) of $0.28, which included legal charges. Excluding those charges, Microsoft earned $0.31 per share for the quarter, slightly higher than estimates by analysts polled by Thomson Financial, which expected Microsoft to earn $0.30 per share for the quarter. For the same quarter last year, net income was $3.7 billion, or $0.34 per share.

Microsoft also reported results for its 2006 fiscal year. The company reported revenue of $44.28 billion for the year, an 11% increase over the prior year. Net income was $12.6 billion, or $1.27 per share, a penny over estimates by Thomson Financial analysts, which expected the company to earn $1.26 per share for the year.

In addition to reporting financial results, Microsoft also authorised a significant stock repurchase plan. The company said it will repurchase $20 billion in stock by August 17, and an additional $20 billion in an ongoing share repurchase programme that expires on June 20, 2011. The company also says it completed a previously announced $30 billion stock repurchase programme.

Looking ahead to 2007, Microsoft raised its guidance for both revenue and EPS. Previously, the company said it expected revenue in the range of $49.5 billion to $50.5 billion for 2007, but said Thursday it expects revenue to be between $49.7 billion to $50.7 billion. Microsoft anticipates EPS for 2007 will be in the range of $1.43 to $1.47, higher than the range of $1.36 to $1.41 it previously expected.