The Channel logo


By | Dan Goodin 24th January 2008 22:31

Microsoft rides PCs and Xboxen to rich Q2

Take that, Apple

Microsoft reported fiscal second-quarter earnings that surpassed Wall Street's already lofty expectations, as sales of PCs and Xboxes soared. The company also forecast future results that met or beat analysts' outlook.

Net income for the period ended December 31 rose 79 per cent to $4.7bn, or 50 cents a share, from $2.6bn, or 26 cents, in the same quarter last year. Revenue rose 30 per cent to $16.4bn from $12.5bn.

Microsoft benefited from sales of PCs that grew a heady 15 per cent in the quarter and from sales of the Xbox, which edged out Sony's PlayStation 3 in December to take the No. 2 spot behind Nintendo's Wii.

Of more importance to Microsoft investors were results for current and future quarters. Redmond forecast profit for its fiscal year ending in June to be in the range of $1.85 to $1.88 in earnings per share, with sales of $59.9bn to $60.5bn. That was higher than analysts had expected and higher than a previous forecast of $1.78 to $1.81 and sales of $58.8bn to $59.7 bn.

The upbeat forecast stands in stark contrast to the comparatively dour one Apple gave earlier this week, which was well below Wall Street expectations. That gave rise to speculation that the softening US economy could eat in to iPod and Mac sales as consumers scale back purchases.

It's too early to say if the sooth-sayers in Redmond believe their consumer products will better withstand the coming nuclear winter many expect. That's one possibility. Another is that Microsoft's server software and other products aimed at large businesses will make up for expected shortfalls on the consumer side. That's a luxury Apple doesn't have.

In the current quarter, Microsoft said profit will be 43 cents to 45 cents on sales of $14.3bn to $14.6bn, in line with the average analyst estimates for profit of 44 to 45 cents and sales of $14.7bn.

Microsoft shares rose 5 percent in after-hours trading following the report. They gained 4 percent in regular trading. ®

comment icon Read 26 comments on this article alert Send corrections


Frank Jennings

What do you do? Use manual typwriters or live in a Scottish croft? Our man advises
A rusty petrol pump at an abandoned gas station. Pic by Silvia B. Jakiello via shutterstock

Trevor Pott

Among other things, Active Directory needs an overhaul
Baby looks taken aback/shocked/affronted. Photo by Shutterstock

Kat Hall

Plans for 2 million FTTP connections in next four years 'not enough'
Microsoft CEO Satya Nadella


League of gentlemen poster - Tubbs and Edward at the local shop. Copyright BBC
One reselling man tells his tale of woe