REDMOND, WASH. (AP) - Microsoft Corp.’s latest quarterly earnings rose 31 percent even as sales of its Windows operating system sagged.
The fiscal third-quarter results released Thursday exceeded analyst estimates.
Still, it marks the second straight quarter that revenue in Microsoft’s Windows division has dropped from the previous year. That may heighten investor worries that Microsoft’s highly profitable franchise of licensing software for personal computers may be heading into a gradual decline. The company faces threats from the iPad and other tablet computers that rely on rival operating systems made by Apple Inc. and Google Inc.
Revenue in Microsoft’s Windows division fell 4 percent, slightly worse than the fall-off in PC shipments tracked by the research firm IDC
Microsoft shares fell 55 cents, or 2 percent, to $26.16 in extended trading Thursday after the quarterly results came out.
Microsoft Corp. is still thriving for now, thanks to growth in its other divisions. Even its online operations, a traditional weak link, brought in more revenue in the quarter, although it sustained another large operating loss.
The Kinect, a motion-sensing controller for Microsoft’s Xbox 360 video game system, remained a hot commodity after ranking among the top sellers in last year’s holiday season. Driven by the Kinect demand, revenue in the company’s entertainment division climbed 60 percent in the quarter.
Overall, Microsoft earned $5.2 billion, or 61 cents per share, in the January-to-March period. That compares with net income of $4 billion, or 45 cents per share, a year ago.
The results included a tax benefit of 5 cents per share from a settlement of an audit covering 2004 to 2006. Even without that one-time gain, Microsoft’s earnings would have topped the average estimate of 55 cents per share among analysts surveyed by FactSet.
Revenue increased 13 percent to $16.4 billion _ about $250 million above analyst estimates.
Please read our comment policy before commenting.