RealTime IT News

Microsoft Toes The Line

Buoyed by strong desktop-software sales, Microsoft delivered results in line with forecasts and said it expects both revenues and earnings to hold mostly steady next quarter.

In the quarter ended June 30, Microsoft reported revenues of $7.25 billion, a 10-percent jump from the same period a year ago. Net profit came in at $1.53 billion, up from the $65 million reported last year, when the company took a variety of investment-related charges.

Excluding charges, Microsoft reported earnings of 43 cents a share, slightly above estimates of analysts polled by First Call/Thomson Financial expected the company to return earnings of 42 cents.

"Robust customer demand for Windows XP and other desktop software enabled us to deliver strong operating results this quarter, in spite of continued uncertainty in the technology markets," said John Connors, Microsoft's CFO, in a statement. "While the current environment remains challenging, we're making important investments in product development, marketing and in our sales force that will position us for success in the current year and beyond."

The Redmond, Wash., company's desktop software sales hit $4.97 billion, a 9-percent increase in the quarter. Microsoft reported strong demand for its business versions of Windows, as well as Office. At the end of the month, Microsoft will switch over to its controversial software-licensing policy, which requires customers to automatically upgrade their Microsoft software instead of picking when to do so.

In an effort to buff up its sales, Microsoft recently announced it would add 450 salespersons over the next fiscal year, the company's largest sales expansion in a decade.

Looking ahead, Microsoft said it expected revenues to dip next quarter to between $7 and $7.1 billion. The company forecast diluted earning per share would be between 42 and 43 cents.