Feeds

Microsoft's Q3 hurt by settlement costs

Sun puts small dent in golden egg

  • alert
  • submit to reddit

Internet Security Threat Report 2014

Microsoft celebrated solid revenue growth in its third quarter but felt the pains of recent legal settlements with net income falling year-over-year.

Microsoft reported $9.18bn in revenue for the period ended 31 March. This marks a 17 per cent increase over the $7.84bn posted in the same quarter a year ago.

The company's net income total came in at just $1.32bn. This total includes $501m in after-tax charges for stock-based compensation and $1.89bn in after-tax charges for Microsoft's recent settlement with Sun Microsystems and fines imposed by the European Commission.

In the same quarter last year, Microsoft reported $2.14bn in net income, including a $655m after-tax charge for stock-based compensation.

Microsoft's CFO John Connors steered clear of the charges in a brief statement about the Q3 results.

"Broad-based demand and solid execution across all our businesses drove outstanding results for the quarter," Connors said. "All of our businesses met or exceeded our expectations this quarter with the Client, Information Worker and Server and Tools businesses growing a combined 17 per cent. Overall corporate IT spending continued to improve and we expect to see healthy demand through the end of our fiscal year."

Microsoft clearly took a hit for the $590m fine handed down by the EU, and its $2bn settlement with Sun. The payments, however, did little to stop the cash juggernaut. Microsoft now has $56.4bn in cash and short-term investments compared to $53bn in the previous quarter and $49bn a year ago. Favorable exchange rates helped Microsoft out in the third quarter.

Microsoft's main businesses all showed gains during the quarter. Its client business pulled in $2.9bn versus $2.5bn in the same quarter last year. The server business jumped to $2.2bn from $1.8bn, and the Office business grew to $2.7bn from $2.3bn.

Microsoft's MSN business posted $591m in revenue compared to $508m last year. Online advertising and paid search drove the growth, showing a 43 per cent year-over-year surge in revenue. MSN subscription revenue declined $17m, leaving Microsoft with 8.2m subscriptions.

Its Xbox producing home entertainment biz upped revenue to $530m from $453m. Unit sales of the Xbox increased 30 per cent. Its SMB software group also upped revenue to $153m from $147m.

Mobile sales are still coming along quite slowly. The mobile group generated just $61m in sales compared to $46m last year.

Microsoft expects fourth quarter revenue to come in between $8.9bn and $9.0bn. Full the full year, Microsoft is looking for revenue between $37.8bn and $38.2bn. ®

Related stories

Microsoft sees Judge, looks busy
MS to probe human-computer interface
Birth of the Evil Empire? Snapshots from billg's early days
Microsoft smokes peace pipe with Minnesota plaintiffs
Windows Update groans under patch load
Microsoft charity licence gets lukewarm welcome
Microsoft: May expectations for Longhorn

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.