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Microsoft on
Thursday in its fiscal fourth-quarter report, said profit
climbed 48% as the software giant benefited from strong
demand for the Windows 7 operating system and the new Office
suite of software. Meanwhile Amazon.com reported
earnings rose 45% on a 41% increase in sales.
Microsoft was
boosted by increased spending by businesses and the Windows
7 is the fastest-selling in the company's history. "The
Windows franchise is thriving," Bill Koefoed,
Microsoft's investor relations general manager, said during
the earnings call.
Revenue expanded
at all five of the the software giant's divisions. Sales at
Microsoft's client division, which makes the Windows
operating system, rose 44%, as earnings grew 59%. Servers
and tools sales added 14%. In online services, one of the
company's smallest, revenue grew 13%.
At the business
division, which earns depends on sales of Microsoft Office,
sales grew 15% as profit rose 21%. The division benefited
from the release of Office 2010.
“This
quarter’s record revenue reflects the breadth of our
offerings and our continued product momentum,” said Peter Klein, chief financial officer.
“The revenue growth, combined with
our ongoing cost discipline, helped us achieve another
quarter of margin expansion.”
For the fiscal year ended June 30,
2010, Microsoft reported record revenue of $62.48bn, a 7% increase from
the prior year. Operating income, net income and diluted earnings per share for
the year were $24.10bn, $18.76bn and $2.10, which represented
increases of 18%, 29% and 30%, respectively, when compared with the prior year.
Instant analysis of
Microsoft's earnings, with Jane Snorek, FAF Advisors:
Amazon.com
Amazon
reported net sales increased 41% to $6.57bn in the second quarter,
compared with $4.65bn in second quarter 2009. Excluding the $48m
unfavorable impact from year-over-year changes in foreign exchange rates
throughout the quarter, net sales would have grown 42% compared with second
quarter 2009.
Net income increased 45% to $207m in the second quarter, or $0.45 per diluted share, compared with net
income of $142m, or $0.32 per diluted share, in second quarter 2009.
"We're seeing rapid growth
in Kindle, Amazon Web Services, third-party sales, and retail. We're also
encouraged by what we see in mobile. In the last twelve months, customers around
the world have ordered more than $1bn of products from Amazon using a
mobile device," said Jeff Bezos, founder and CEO of
Amazon.com. "The leading mobile commerce device today
is the smartphone, but we're excited by the potential of the new category of
wireless tablet computers. Over time, tablet computers could become a meaningful
additional driver for our business."
Earlier in the week, Amazon reported
a milestone in its Kindle business, selling more e-books than hardbacks over the
past three months.
However, the shares fell 13% in
after-hours trading because of a jump in marketing expenses.
