Microsoft fiscal 2Q earns up 60 pct on PC rebound

Jan 28, 2010 By JESSICA MINTZ , AP Technology Writer
In this photo made Jan. 11, 2010, a display for Microsoft's Windows 7, and its applications for a digital retail experience, is shown at the National Retail Federation's convention in New York. Amazon.com Inc., reports quarterly earnings after the market close Thursday, Jan. 28, 2010.(AP Photo/Mark Lennihan)

(AP) -- Microsoft Corp. said Thursday its earnings in the most recent quarter jumped 60 percent, as a rebound in the personal computer industry drove sales of the company's latest Windows operating system.

But the division that makes and other business programs, Microsoft's other cash cow, saw slip 3 percent, while revenue from its fast-growing server software group edged up just 2 percent. That's evidence the turnaround in technology spending remained limited to consumers buying new PCs during the holiday quarter.

bounced back during the holiday shopping season after one of its roughest years to date, but analysts attributed nearly all the gains to consumers drawn to inexpensive laptops and their smaller, less powerful cousin, the .

For the fiscal second quarter, which ended Dec. 31, said its net income rose to $6.7 billion, or 74 cents per share, from $4.17 billion, or 47 cents per share, in the same period last year.

The latest version of Windows, called Windows 7, was released in October, but in the months before the launch Microsoft gave new PC buyers the right to upgrade to Windows 7 later. The second-quarter results included $1.7 billion in deferred revenue for Windows sales made during earlier quarters but not recorded until the launch.

That added 14 cents to the software maker's net income. Excluding the gain, Microsoft said it earned 60 cents per share in the quarter, one cent more than analysts polled by Thomson Reuters were expecting.

Revenue increased 14 percent to $19 billion from $16.6 billion in the year-ago quarter.

Excluding the deferred Windows revenue, the total was $17.3 billion, slightly less than the $17.8 billion Wall Street was expecting.

In the Windows division, revenue leapt 70 percent and nearly doubled to $5.4 billion.

Microsoft is expected to release a new version of Office this year, which could account for the lack of growth in the company's business software division. The company also faces increasing competition from Google Inc.'s Web-based word processing, spreadsheet and other software.

Shares of Microsoft rose 45 cents, or 1.5 percent, to $29.61 in extended trading Thursday after the release of results. Earlier, shares closed down 51 cents, or 1.7 percent, at $29.16.

Explore further: Ex-Apple chief plans mobile phone for India

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Soft PC sales send Microsoft profit down 29 pct

Jul 23, 2009

(AP) -- Microsoft Corp. said Thursday its profit in the last quarter plunged 29 percent because of weak computer sales, ending a fiscal year in which the software maker's revenue fell for the first time since ...

Microsoft feels more recession fallout, sales drop

Apr 23, 2009

(AP) -- Microsoft Corp. said Thursday its quarterly revenue fell from the previous year for the first time in its 23-year history as a public company, and its profit fell more sharply than Wall Street was ...

Holiday shopping, PayPal help eBay 4Q profit rise

Jan 20, 2010

(AP) -- EBay Inc. said Wednesday its fourth-quarter earnings climbed, bolstered by growth in its PayPal payments business and a holiday shopping season that was healthier than the year before. The company ...

Qualcomm stock tumbles on cautious forecast

Jan 27, 2010

(AP) -- Qualcomm Inc., whose chips and other technologies are used in vast numbers of cell phones, sounded a cautious note on the economy on Wednesday, saying a "subdued" recovery forced it to slightly dial ...

Recommended for you

Chinese tech giant Alibaba set to make a splash with US IPO

8 hours ago

The largest tech IPO of the year will come from a company that many Americans have never heard of. Alibaba Group - a Chinese e-commerce behemoth - has decided to go public in the U.S. after months of speculation that it would ...

Ex-Apple chief plans mobile phone for India

Apr 19, 2014

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Apr 19, 2014

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

User comments : 0

More news stories

Growing app industry has developers racing to keep up

Smartphone application developers say they are challenged by the glut of apps as well as the need to update their software to keep up with evolving phone technology, making creative pricing strategies essential to finding ...

Making graphene in your kitchen

Graphene has been touted as a wonder material—the world's thinnest substance, but super-strong. Now scientists say it is so easy to make you could produce some in your kitchen.