Deferred revenue drives Microsoft to solid Q3

Deferred Vista, Office revenue drives Microsoft to 32 percent growth in fiscal third quarter.

Deferred revenue from the release of Windows Vista and Office 2007 helped Microsoft increase revenue 32 per cent year over year for its fiscal third quarter, with the company reporting $US14.4 billion in revenue for the three months ended March 31.

After taking into account $US0.02 in tax benefits and $US0.01 in legal charges, earnings per share for the quarter were $US0.49, which was $US0.03 higher than estimates from Thomson Financial analysts. Revenue was slightly higher than Microsoft expected for the quarter; the company had predicted revenue in the range of $US13.89 billion and $US14 billion. Last year, the company earned $US10.9 billion in revenue for the same period. Microsoft also beat its own guidance for EPS, which had been in the range of $US0.45 to $US0.46.

After delaying the release of both its Vista client OS and Microsoft Office 2007 from its fiscal second quarter to early in its third quarter, Microsoft deferred $US1.67 billion of revenue and operating income, $US1.14 billion of net income and $US0.12 of diluted earnings per share into the third quarter. This had a positive effect on the quarter's results.

Wall Street analysts had expected an in-line quarter for the company, as Microsoft had played down the revenue impact from Vista so the company would not get slammed by the street if earnings were less than anticipated. However, Vista did a little better than the company predicted. This drove revenue up slightly higher than estimates.

Net cash flow from operations was $US7.29 billion for the quarter, and Microsoft returned $US7.72 billion in cash to shareholders through share buybacks and dividends in the quarter.

The company continued its conservative trend for its fiscal fourth quarter guidance. It expects revenue from $US13.1 billion to $US13.4 billion, and diluted EPS in the range of $US0.37 to $US0.39 for the quarter, which ends June 30.

Microsoft also made predictions for its next fiscal year, which ends June 30, 2008. Microsoft expects revenue in the range of $US56.5 billion to $US57.5 billion, and diluted EPS from $US1.68 to $US1.72.

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Elizabeth Montalbano

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?