Microsoft reports profit surge

 

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By Reuters

Posted on 25 Jan 2008 at 08:03

Microsoft has posted a 79% rise in quarterly profits, bolstered by booming PC sales.

Microsoft reported bumper sales of its Windows Vista operating system, which it claims has surpassed 100 million licences. It also picked out its Office software and anti-piracy measures for praise.

Net profit in Microsoft's fiscal second quarter rose to $4.7 billion from $2.6 billion last year, with revenue surging 30% to $16.37 billion.

However, the figures are exaggerated by last year's results, when Microsoft deferred more than $1 billion in net income due to delays in releasing Vista and Office, which hit stores in early 2007.

The news buoyed Microsoft shares by 4.5%, a stark contrast to rivals Google and Apple which despite posting solid financial results still saw their share price fall amid warnings that there may be gloomier times ahead.

"It's clear that this new product cycle is paying off," says Andy Miedler, technology analyst at Edward Jones. "We're impressed that they had enough confidence to follow thorough and raised guidance. They continue seeing the business being healthy for the remainder of the fiscal year."

"We're probably a little cautious in the back half of the year, but that's made up for in the other parts of the economy," says Microsoft's chief financial officer Chris Liddell.

"Even if we shave a few percentage points off, we think the overall level of growth is still very healthy."

Microsoft has long argued its products are less sensitive to swings in technology spending because they account for a small, but essential, portion of overall spending by corporate customers.