Microsoft beats Street despite drop in consumer PC sales
Microsoft Corp (NASDAQ:MSFT) announced late Thursday a 30% increase to its fourth quarter net income, beating Street estimates, despite a drop in revenues from its flagship Windows software and devices unit.
For the three months ending June 30, the computer software giant posted net income of $5.9 billion, or $0.69 per share, up 30% over $4.5 billion, or $0.51 per share, a year ago.
Total revenues were $17.4 billion, an 8% hike over the $16 billion the company made a year ago. Analysts had expected earnings of 58 cents, on $17.3 billion in revenues.
For the full year fiscal 2011, Microsoft posted profits of $23.2 billion, or $2.69 per share, up 23% from $18.8 billion, or $2.13 per share, a year ago. Revenues rose 12% to $69.9 billion, from $62.5 billion in the prior year period.
"Throughout fiscal 2011, we delivered to market a strong lineup of products and services which translated into double-digit revenue growth," said CFO Peter Klein.
"Our platform and cloud investments position us for long-term growth."
The company's Windows and Windows Live division, which includes sales of its Windows operating system, posted a 1% drop in revenues to $4.7 billion, reflecting lower PC sales to consumers, especially with notebook computers, but higher sales to businesses, Microsoft said.
Still, Microsoft said it has sold over 400 million licenses of its Windows 7 software, and unveiled plans to launch Windows 8 in the future.
The Server and Tools division saw a 12% hike in revenues to $4.6 billion, driven by the company's Windows Server, System Center, and SQL Server systems. Meanwhile, the Online Services division, which includes search revenue from the company's Bing search engine, posted a 17% increase in revenues, to $662 million for the quarter.
The Business unit, which includes Microsoft Office, the 2010 version of which remains the fastest-selling version of the program in the company's history, with over 100 million licenses sold, posted revenues of $5.8 billion, up 7% year-over-year.
Microsoft's Entertainment and Devices business posted the strongest growth, 30% year-over-year, with revenues of $1.5 billion. The Kinect gaming console and the Xbox 360 console, and its accessories, including the Xbox LIVE program, drove sales, with 1.7 million Xbox consoles shipped during the quarter.
Based in Redmond, Washington, Microsoft shares on Nasdaq slipped 0.9% in premarket trading, to $26.85 per share.
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