Microsoft Profit Rises 60%, Tops Analysts' Expectations with Wires

Microsoftsaid its earnings in the most recent quarter jumped 60 percent, helped by a rebound in personal computer sales.

Photo by: Robert Scoble

The PC industry bounced back during the 2009 holiday shopping season after one of its roughest years to date. Microsoft's earnings are closely tied to computer sales because its two most profitable divisions make the Windows operating system and the Office set of business software.

Microsoft said Thursday its net income for the fiscal second quarter that ended Dec. 31 rose to $6.7 billion, or 74 cents per share. Revenue increased 13 percent to $19 billion.

Microsoft outstripped analysts' forecasts by 15 cents a share. Wall Street expected Microsoft to earn 59 cents a share on sales of $17.9 billion, according to a poll from Thomson Reuters.

"These are outstanding numbers. 74 cents was comparable to the 59 cents people were expecting, so it was a big beat. The upside was in the Windows business and service and tools and office business. The online business came in line and the only business shy of expectations was Xbox," said Brendan Barnicle, analyst at Pacific Crest Securities.

The latest version of Windows, called Windows 7, was released during the quarter. Revenue from the Windows business jumped 70 percent.

Microsoft & Amazon Earnings

Shares of Microsoft moved moderately higher in extended trading. Click here for after-hour stock quotes for Microsoft.

Rivals International Business Machines, Google and Apple have all beaten average Wall Street estimates this quarter, but saw their stocks fall or gain only slightly afterward.

Excluding deferred revenue from the Windows 7 Upgrade Option Program, Microsoft said it earned 60 cents a share.