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Microsoft ended 2007 on a high

by Scott Bicheno on 25 January 2008, 11:13

Quick Link: HEXUS.net/qalez

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Better than expected

After the below-expectation forecasts of recent days from the likes of Intel and Apple, confidence was restored to the technology sector when Microsoft announce above-expectation Q2 results and forecasts for the whole of its financial year, which ends in the middle of the calendar year just to make things difficult.

Microsoft has announced its second quarter figures of $16.37 billion in revenue, $6.48 billion in operating income and $0.50 in diluted earnings per share. All of these are records for Microsoft in Q2 and represent increases of 30, 87 and 92 per cent respectively on the year before.

The year-on-year comparisons are distorted by the deferral of $1.64 billion of operating income a year ago to the following quarter, due mainly to ‘technology guarantee programs’ which concerned offering upgrades to Vista and Office 2007 in advance of their appearance the following quarter. Without this deferral, the growth percentages are still a healthy 15, 27 and 32 respectively.

“Revenue of over $16 billion this quarter exceeds our previous record by $2 billion,” said Chris Liddell, chief financial officer at Microsoft. “We are extremely pleased by the broad based strength of our business performance and field execution. Throughout the first half of our fiscal year, all of our businesses met or beat our expectations.”

Since the Vista launch, Microsoft’s client business has grown over 20 per cent on average and sales of Vista have topped 100 million licenses. “We are pleased with the progress of Windows Vista in the market. We’ve hit our stride with partners and customers and are looking forward to the release of our first service pack later this quarter,” said Kevin Johnson, president of the Platforms and Services Division at Microsoft.

Microsoft’s forecasts for Q3 and for its full fiscal year both exceeded analyst expectations and contradicted the view of Microsoft as a company with relatively mild growth prospects. Microsoft is expected to launch an exceptionally large number of new products this year.

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