Microsoft Delivers On Earnings, The Long Road Ahead (MSFT)

Microsoft Corporation (NASDAQ: MSFT) appears to be yet one more titan of tech that has managed to beat earnings.  While its shares will likely never again see the former peak, the numbers were impressive at $0.69 EPS on $17.37 billion in revenues.  Thomson Reuters had estimates of $0.58 EPS and $17.25 billion in revenues.

As far as a breakdown, the net income was $5.87 billion after operating income of $6.17 billion.  Sales of entertainment and devices was $1.49 billion, online services sales were $662 million, business revenues were $5.78 billion, server and tool revenues were $4.64 billion, and Windows (including Windows Live) brought in $4.74 billion.

Windows and Windows Live sales fell 1% for the fourth quarter and fell 2% for the year. The company said that would have been growth od 2% to 4% had it not been for “the impact of the prior year Windows 7 launch and revenue deferral.”  Windows 7 has now sold over 400 million licenses and the company claims that business deployments continue to accelerate.

Online Services Division sales rose 17% for the quarter and 15% for the full year on gains in search revenue. Bing’s U.S. search share rose 340 basis points year-over-year to 14.4%.

The 2012 guidance is being offered as this was Microsoft’s year-end for operating expense growth of only about 3% to 5%.  Until we have actual revenue and earnings guidance, Microsoft’s full impact from the report should be considered unfinished business.

Shares closed up $0.03 at $27.09 against a 52-week trading range of $23.32 to $29.46; shares are up about 2% at $27.66 in the after-hours reaction.

JON C. OGG