Windows 7 Sales Skyrockets Microsoft Profits
By Partho, Gaea News NetworkFriday, January 29, 2010
With a hyper-sale of Windows 7, Microsoft posted an overwhelming 60 percent jump in quarterly profit. The Redmond based-company announced their net profit for second quarter fiscal touched $6.7 billion ( 74 cents per share) for its fiscal second quarter. This is $ 2.5 billion more than last year. Moreover, the net profit also surpasses the expectations of analysts at Thomson Reuters I/B/E/S who expected it to be 59 cents per share. Microsoft’s stock has run-up after the launch of Windows 7 operating system in October. All the rivals IBM corp., Google Inc and Apple Inc have overcome the average Wall Street estimates this quarter.
As Andy Miedler, analyst at Edward Jones, projects
Make no mistake, these were very good results out of Microsoft. Expectations were heightened ever the last few weeks, given Q4 PC shipments and good numbers from Intel,
However, there are some questions raised against the earnings numbers, as Microsoft is said to have included the effects of deferred revenue from pre-sales of Windows 7 to PC makers and retailers, and its free upgrade program. If the revenue was deducted the profit would have been 60 cents per share.
Apprehending the market volatility, Microsoft stopped making specific profit or revenue forecasts in January 2009.
As told by Chief Financial Officer Peter Klein to Reuters
We didn’t see enterprise spending growth in our fiscal second quarter just ended,
Windows 7 was Microsoft’s strongest-selling operating system till date, given the Visatster with Vista. Last quarter, PC sales grew by 15.2 percent.
MIcrosoft’s revenue climbed 14 percent to $19.02 billion after including $1.71 billion of deferred revenue from the Windows 7 launch in October. Excluding that the revenue the sales would stand at $17.31 billion.
Most analyst speculate that the Microsoft corp. stock had its run. With PC sales going steady and a new applications coming up, the stocks can still outperform. All eyes are on the new Microsoft Office scheduled for a launch in June.
