Updated from 4:34 p.m. EST to provide comments from the conference call in the fifth and sixth paragraphs. REDMOND, Wash. (TheStreet) -- Microsoft (MSFT) shares rose in extended trading following stronger-than-expected earnings.
The Redmond, Wash.-based software giant reported third-quarter earnings of 60 cents per share on $17.41 billion in revenue. Analysts polled by Thomson Reuters had expected 57 cents per share on $17.16 billion in revenue.
CEO Steve Ballmer was positive on the quarter, especially the release of Windows 8, which will be a major driver of revenue. "With the upcoming release of new Windows 8 PCs and tablets, the next version of Office, and a wide array of products and services for the enterprise and consumers, we will be delivering exceptional value to all our customers in the year ahead," Ballmer said in a press release.
Revenue for Windows and Windows Live came in at $4.62 billion during the quarter, up 4% year-over-year. Microsoft Business posted $5.81 billion in revenue, a gain of 9%. Server & Tools recorded $4.57 billion, up 14%, Online Services $707 million, up 6%, and Entertainment & Devices, $1.62 billion, down 16%.On the conference call, Microsoft said the strength in Windows was helped in large part by business PC upgrades, as IT departments across the globe continued to upgrade hardware. There was broad based growth geographically, although there was noted strength in Europe. Although Entertainment & Devices revenue fell 16% year-over-year, the company said it "feels really good about our positioning and strategy in not just gaming, but UI with Kinect and Xbox Live." Xbox 360 has been the number one console for the past 15 months, and Xbox continues to see more demand as an entertainment hub, not just gaming. Microsoft said it expects to have lower operating expenses in fiscal 2012 and 2013. It now expects to have $28.3 billion to $28.7 billion in operating expenses for 2012 and $30.3 billion to $30.9 billion in expenses for 2013. The company ended the quarter with $59.5 billion in cash, up from $52.7 billion a year ago. Shares ended the regular session lower, off 0.4% to $31.01. Microsoft is moving higher in after-hours trading, up 2.87% to $31.90, according to Nasdaq.com. Interested in more on Microsoft? See TheStreet Ratings' report card for this stock. Check out our new tech blog, Tech Trends. Follow TheStreet Tech on your wireless devices. --Written by Chris Ciaccia in New York >To follow the writer on Twitter, go to http://twitter.com/commodity_bull. >To submit a news tip, send an email to: email@example.com
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV