Microsoft Earnings Cheat Sheet: 13.3% Sales Growth on Profitable Quarter

S&P 500 (NYSE:SPY) component Microsoft Corporation (NASDAQ:MSFT) reported net income above Wall Street’s expectations for the third quarter. Microsoft Corporation develops, licenses and supports a range of software products and services for a variety of computing devices.

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Microsoft Earnings Cheat Sheet for the Third Quarter

Results: Net income for Microsoft Corporation rose to $5.23 billion (61 cents/share) vs. $4.01 billion (45 cents/share) in the same quarter a year earlier. A rise of 30.6% from the year earlier quarter.

Revenue: Rose 13.3% to $16.43 billion YoY.

Actual vs. Wall St. Expectations: MSFT beat the mean analyst estimate of 56 cents/share. Estimates ranged from 49 cents per share to 61 cents per share.

Quoting Management: “We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses,” said Peter Klein, chief financial officer at Microsoft. “Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications.”

Key Stats: Net income has increased 32.9% year over year on average across the last five quarters. The biggest gain came in the first quarter, when income climbed 51.4% from the year earlier quarter.

Gross margins grew 5.2 percentage points to 86.2%. The growth appeared to be driven by falling costs, as the figure fell 17.6% from the year earlier while revenue rose 13.3%.

Over the last five quarters, revenue has increased 14.4% on average year over year. The biggest increase came in the first quarter, when revenue rose 25.3% from the year earlier quarter.

Competitors to Watch: Google Inc. (NASDAQ:GOOG), Novell, Inc. (NASDAQ:NOVL), Oracle Corporation (NASDAQ:ORCL), Intl. Business Machines Corp. (NYSE:IBM), Hewlett-Packard Company (NYSE:HPQ), Yahoo! Inc. (NASDAQ:YHOO), Apple Inc. (NASDAQ:AAPL), Adobe Systems Incorporated (NASDAQ:ADBE), Intel Corporation (NASDAQ:INTC), and Sony Corporation (NYSE:SNE).

Today’s Performance: Shares of MSFT are trading at $26.71 as of April 28, 2011 at 4:35 PM ET, down over 1% from the previous closing price of $26.38.


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