Microsoft earnings down 11%

Associated Press

April 25, 2008

SEATTLE - Microsoft Corp. said yesterday that its fiscal third-quarter profit was 11 percent lower than in the year-ago quarter, when the software maker reported more than $1 billion in deferred revenue tied to delays in the launch of the Windows Vista operating system.

Microsoft said its net profit for the three months that ended March 31 fell to $4.39 billion, or 47 cents a share, from $4.93 billion, or 50 cents a share, in the corresponding period last year.

The results beat Wall Street's expectations. Analysts surveyed by Thomson Financial forecast a profit of 44 cents a share.

Investors, in light of the company's guidance and a drop in sales in the division that produces the flagship Office productivity programs, sent shares down $1.43, or 4.5 percent, to $30.37 in after-hours trading.

Revenue edged up to $14.45 billion from $14.4 billion in the year-ago quarter. Analysts were looking for $14.4 billion in sales.

"Despite a difficult economic environment, it was a very good performance," Chief Financial Officer Chris Liddell said in an interview.

Microsoft's online services business, which makes money primarily by selling advertising online, reported a 40 percent increase in sales, to $843 million, but its operating loss grew.

Microsoft has made an unsolicited offer to buy Yahoo as a way to close the gap.