Microsoft's profits more than doubled from a year ago as a new, controversial software licensing plan helped drive sales and insulate the company from the turmoil hitting the technology industry.
For the three months ending September 30th, the software maker had a profit of $2.73 billion, or 50 cents a share, compared to net earnings of $1.28 billion, or 23 cents a share, for the same period a year ago.
The results included one-time charges of $291 million, or five cents a share, related to weakness in Microsoft's investments. A year earlier, Microsoft wrote down $1.2 billion on investments.
Microsoft's fiscal first-quarter revenue totaled $7.75 billion, up 27% per cent from $6.1 billion in sales a year ago.
The company surpassed Wall Street's expectations. Analysts surveyed by Thomson First Call had a consensus estimate of 43 cents a share on revenue of $7.1 billion.
Microsoft cited a higher-than-expected enrolment in new, subscription-like licensing plans that require companies to sign multiyear agreements and pay annual fees in return for rights to software upgrades.
The new plans also eliminate many discounts that companies could receive when they chose to upgrade.
"It was a blowout," said Scott McAdams, chief executive of Seattle-based investment research firm McAdams Wright Ragen. "We haven't seen a quarter like this in years."
Microsoft shares closed up 36 cents yesterday at $50.77 on the Nasdaq Stock Market. Shares went up $2.44 a share in extended trading after Microsoft released its first-quarter results.
AP