Microsoft Reports 6% Increase in Q1 Profit (MSFT)




microsoftTechnology giant Microsoft Corporation (NASDAQ: MSFT) released its first-quarter fiscal 2012 financial results after market close today. Although the company reported an increase in first-quarter net income, results reflected weak growth in PC sales.

For the first quarter of fiscal year 2012, Microsoft reported net income of $5.74 billion, or $0.68 per share, representing an increase of 6% over the same period in the previous year. The company’s revenue for the first quarter of fiscal 2012 climbed 7% on a year-over-year basis to $17.37 billion.


Analysts were on average expecting the maker of Windows operating system to report earnings of $0.68 per share and revenue of $17.24 billion.

Peter Klein, CFO of Microsoft, said that the company saw customer demand across the breadth of its products, resulting in record first-quarter revenue and another quarter of solid earnings growth.

Microsoft’s first-quarter revenue from Windows sale rose less than 2%, reflecting the weakening demand for PCs. Growing economic uncertainty has led to a decline in technology spending, hurting demand for PCs. PC demand has also been negatively impacted by the rising popularity of tablet devices and smartphones.

According to data from IDC, PC shipments grew 3.6% worldwide in the third quarter of 2011.

Although PC demand has slowed down globally, it is still robust in countries such as India and China. However, Microsoft does not fully benefit from growing demand in India and China due to high software piracy rates in these countries.

PC demand has also been hurt by the increasing popularity of tablet devices, especially the iPad. Tim Cook, CEO of iPad maker Apple Inc. (NASDAQ: AAPL) said earlier this week that iPad was cannibalizing some sales of the company’s Macs, however, a materially larger number of iPad buyers were choosing iPad over a Windows PC.

Another area where Microsoft has lagged behind is the smartphone market.

 


edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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