Feeds

Microsoft profits and sales go skyward

Licensing bonanza

  • alert
  • submit to reddit

Combat fraud and increase customer satisfaction

Microsoft, the biggest software company on earth, once again bucked the trend in the IT sector by posting higher sales and earnings.

While most other global IT firms have struggled to grab more sales, Microsoft on Thursday said its sales were up nearly 11 percent year-on-year in its fiscal fourth quarter, to USD8.07 billion. CFO John Connors said that favourable exchange rates boosted revenue by USD255 million, but even without this gain, the company's revenues would have been up by 8 percent.

In its two most important product areas, Windows and Office, Microsoft recorded higher sales, thanks to its new licensing program. Windows sales were up 4 percent to USD2.43 billion in the quarter and Office revenues shot up 8 percent to USD2.35 billion during the period.

The company, which is also making pushes on the server, handheld and video game console fronts, said that fourth quarter net income was up 26 percent to USD1.92 billion, or USD0.19 per share, over the year earlier quarter. This figure would have hit USD0.23 per share, were it not for the USD533 million after-tax charge for a legal settlement with AOL Time Warner.

However, by that measure, the company actually missed the average estimate of analysts polled by Thomson First Call, who were calling for earnings of USD0.24 per share. It is also expected that investors will react poorly to Microsoft's absence of a dividend payout, despite the company's treasure trove of USD49.05 billion in cash and short-term investments, up USD10 billion from Q4 2002.

To put this cash balance into perspective, Microsoft's horde is just under half the size of Ireland's gross domestic product (GDP) for 2002 and is double Cuba's GDP for the same year.

Regarding the lack of a dividend, Connors told reporters and analysts that the company was holding back on certain decisions -- presumably items like dividend payouts -- until Microsoft resolved "a couple of still significant outstanding legal issues."

The software maker is facing an antitrust investigation in the European Union over server software and video playback software, and a private antitrust suit by Sun Microsystems that revolves around Java. Next week, the company will have its annual analyst meeting and it is expected that company will offer more details over what it plans for its enormous pile of cash.

In other parts of its results, the company detailed, for the first time, the financial impact of a new stock-based employee compensation plan, which it announced early July. For the year ending June 2004, Microsoft expects per-share earnings of USD0.85 to USD0.87, including a stock-based-compensation expense of USD3.9 billion, or USD0.24 a share, a figure that slightly beats expectations.

Also heartening to analysts is the company's forecast for sales in that year of USD34.2 billion to USD34.9 billion, with even the low end of that estimate USD300 million ahead of Thomson First Call's prediction.

Though the company's results seem to indicate that there is at least a small up-tick in tech spending, Connors said that in FY 2004, Microsoft is not anticipating a repeat of its massive growth in income, which in fiscal 2003 totalled USD10 billion on the back of a new licensing scheme. He also said that positive currency shifts will die off in FY2004 and shipments of the Windows XP operating system will weaken slightly.

© ENN

SANS - Survey on application security programs

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Oh no, Joe: WinPhone users already griping over 8.1 mega-update
Hang on. Which bit of Developer Preview don't you understand?
Microsoft lobs pre-release Windows Phone 8.1 at devs who dare
App makers can load it before anyone else, but if they do they're stuck with it
Half of Twitter's 'active users' are SILENT STALKERS
Nearly 50% have NEVER tweeted a word
Internet-of-stuff startup dumps NoSQL for ... SQL?
NoSQL taste great at first but lacks proper nutrients, says startup cloud whiz
IRS boss on XP migration: 'Classic fix the airplane while you're flying it attempt'
Plus: Condoleezza Rice at Dropbox 'maybe she can find ... weapons of mass destruction'
Ditch the sync, paddle in the Streem: Upstart offers syncless sharing
Upload, delete and carry on sharing afterwards?
New Facebook phone app allows you to stalk your mates
Nearby Friends feature goes live in a few weeks
Microsoft TIER SMEAR changes app prices whether devs ask or not
Some go up, some go down, Redmond goes silent
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.