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Microsoft profits beat estimates | |
(about 1 hour later) | |
Microsoft, the world's largest computer software company, has reported earnings that topped analyst forecasts. | Microsoft, the world's largest computer software company, has reported earnings that topped analyst forecasts. |
Net profit was $3.48bn (£1.8bn), or 35 cents a share, in the three months to 30 September, from $3.14bn a year ago. | Net profit was $3.48bn (£1.8bn), or 35 cents a share, in the three months to 30 September, from $3.14bn a year ago. |
Analysts had forecast 31 cents a share and said earnings would have been stronger had there not been delays to Microsoft's new Vista operating system. | Analysts had forecast 31 cents a share and said earnings would have been stronger had there not been delays to Microsoft's new Vista operating system. |
The company said that the main driver of growth was strong sales of its server software, such as SQL Server. | The company said that the main driver of growth was strong sales of its server software, such as SQL Server. |
Total quarterly sales climbed to $10.8bn, also a rise of 11% from the same period a year earlier. | Total quarterly sales climbed to $10.8bn, also a rise of 11% from the same period a year earlier. |
"My first take is it was impressive on the top line and the bottom line," said Kim Caughey, an analyst at Pitt Capital. | "My first take is it was impressive on the top line and the bottom line," said Kim Caughey, an analyst at Pitt Capital. |
"All things look good at this point. That is the barometer for the other stocks we own," she added. | "All things look good at this point. That is the barometer for the other stocks we own," she added. |
'Better guidance' | |
Despite the positive tone to the first part of the fiscal year, Microsoft trimmed its earnings forecast for the current quarter. | |
The company said it now expected earnings per share of between 22 cents and 24 cents on sales of between $11.8bn and $12.4bn. | |
Microsoft also gave its full-year earnings targets of $1.43-$1.46 per share on revenue of $50bn-$50.9bn. | |
While that was broadly in line with market expectations, Microsoft's shares dipped in after-hours electronic trading in New York on the news. That signals the shares will fall when the stock market reopens on Friday. | |
Mike Binder, a fund manager at Thrivent Financial, said that a main uncertainty for Microsoft was the release of its Vista programme that, due to replace its best-selling Windows product. | |
Microsoft could not give better guidance for the year "until Vista unfolds", he said. | |
Microsoft is expected to release its Windows Vista programme before the end of this year, and will also put out an upgrade of its Office product. | |
Vista is now due to reach business customers in November and consumers in January. | |
Microsoft had originally aimed to launch Vista in August 2006. |