Despite costly Xbox repairs, the software titan Microsoft Corp has posted solid fiscal fourth-quarter performance.
The software giant profit mounts 7.3% to $3.04 billion, or 31 cents per share, from $2.83 billion, or 28 cents per share, during the same period last year. Meanwhile, Microsoft earned $14.1 billion, or $1.42 a share, on record sales of $51.1 billion.
Revenue grew 13 percent to $13.37 billion from $11.80 billion last year, just ahead of Wall Street’s estimate of $13.27 billion.
Windows PC software, Windows server software and Office’s revenue grew about 14%, 15% and 19%, respectively, compared to the year-earlier period.
Strong contract sales bode well for Microsoft’s plans to roll out server, database and communications software that tie into Vista and Office 2007 in coming months. Charly Tracy, Microsoft senior finance manager, said:
We’re having very good success re-signing contracts that are coming up for expiration and corporations are buying Vista and Office in anticipation of the new server programs
Revenue from the Web advertising augmented by 33 percent to $544 million, but its online services division faces $239 million loss.
Microsoft was hit hard by the failure its’ Xbox 360. Microsoft repaired its general hardware complications and in early July it extended its warranty to three years. Hardware complication drop in Xbox 360 and PC video game sales and revenue decreases in that division by 10 percent to $1.16 billion. Industry watchers wonder whether Microsoft will lower Xbox 360 prices, following the lead of Sony Corp, which cut the price of its PlayStation 3 console this month.
Coping up from the set backs, now Microsoft is counting on several big product launches, including updated server software and the much-anticipated “Halo 3″ video game, to spark double-digit growth next year.
With the profitable quarter, software titan has ups its expectations from the current quarter, which will end in Sept. 30. Microsoft expects to earn 38 cents to 40 cents per share on $12.4 billion to $12.6 billion in sales. Meanwhile, for fiscal 2008, the company raised earnings-per-share expectations by a penny, to $1.69 to $1.73, and boosted its revenue forecast to $56.8 billion to $57.8 billion from $56.5 billion to $57.5 billion.
Via: USA-Today
