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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Friday, July 18, 2008 Microsoft's 4th-quarter profit jumps 42 percent Associated Press SEATTLE -- Microsoft Corp. said Thursday its fiscal fourth-quarter profit jumped 42 percent, helped by strong sales of its Office and Windows software, but the company offered a soft outlook for the current quarter. Earnings for the three months ended June 30 rose to $4.3 billion, or 46 cents per share, missing Wall Street's expectations by a penny per share. In the year-ago quarter, Microsoft reported earnings of $3 billion, or 31 cents per share. Revenue increased 18 percent to nearly $15.8 billion from $13.4 billion last year, just ahead of Wall Street's average forecast of $15.7 billion, according to a Thomson Financial survey. "Those are very good numbers for a company of our size, in what many companies are finding challenging (conditions)," Microsoft's chief financial officer Chris Liddell said in an interview. Despite the solid results, Microsoft offered guidance short of Wall Street's expectations for the current first quarter. The firm said it expects to earn 47 to 48 cents per share on $14.7 billion to $14.9 billion in sales. Analysts had been looking for a profit of 49 cents per share on $15.1 billion in revenue. Shares sank $1.52, or 5.5 percent, to $26 in after-hours electronic trading, after rising 26 cents to close at $27.52. Liddell explained the shortfall by saying analysts didn't accurately model first-quarter results from the full-year guidance Microsoft offered in its last quarterly report in April. Indeed, Microsoft's full-year guidance for fiscal 2009 was essentially unchanged Thursday. The division responsible for Microsoft's longtime sure-fire profit engine, the Windows operating system, posted a 16 percent rise in earnings to $3.22 billion in the quarter. Liddell said the company sold 50 million Vista licenses in the quarter, for a total of 190 million since the operating system's January 2007 launch. Strong PC sales, up more than 15 percent from a year ago, helped bolster results for Windows and Microsoft's Office productivity software. Earnings for the segment that produces Office and other business software gained 12 percent to $3.34 billion. But the divisions responsible for the Xbox 360 and for selling online advertising lost money in the quarter. Microsoft's online services business lost $488 million, more than double its year-ago loss.

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