Microsoft profits up despite fall-off in PC sales

Software giant is struggling with declining PC sales and a lukewarm reception for its new Windows 8

Microsoft  is struggling with declining PC sales and a lukewarm reception for its new Windows 8 operating system. Photograph: Chang W. Lee/The New York Times

Microsoft is struggling with declining PC sales and a lukewarm reception for its new Windows 8 operating system. Photograph: Chang W. Lee/The New York Times

 

Despite a sharp slump in global sales of personal computers, Microsoft said its third-quarter profit rose 19 per cent, driven by rising sales from its Windows and Office software products.

The software company also disclosed that Peter Klein, its chief financial officer, will leave the company later this year after nearly four years of running the company's finance department.

Microsoft said it would name a replacement from its finance team within the next several weeks.

Mr Klein's departure was unexpected, but the company's revenue and profit figures exceeded Wall Street estimates. For its fiscal third quarter, which ended March 31st, the company reported net income of $6.06 billion, or 72 cents a share, up from $5.11 billion, or 60 cents a share in the same period a year ago.

Revenue rose 18 per cent to $20.49 billion from $17.41 billion. While revenue came in slightly below analysts' expectations of $20.56 billion, the company beat forecasts of 68 cents a share, according to analysts.

Microsoft said revenue from its Windows division rose 23 per cent to $5.7 billion from $4.63 billion a year earlier.

The increase included the delayed recognition of revenue from an upgrade offer that allowed Microsoft customers last year to receive the latest Windows operating system, Windows 8, after it was released last fall.

Without that deferred revenue, sales in Microsoft's Windows division were flat, the company said.

Mr Klein, an 11-year Microsoft veteran, is the latest in a line of top-level executives to leave the company, following Windows head Steven Sinofsky last November.

Some have questioned whether chief executive Steve Ballmer is still the right leader for Microsoft, whose shares have remained essentially flat for the last decade.

Microsoft shares rose 1.5 percent in after-hours trading.