Citing increased demand for its products from both consumers and corporate buyers, Microsoft Corp. on Thursday reported a 19 percent year-over-year revenue jump but lower net income due to equity compensation costs for its second fiscal quarter.
The Redmond, Washington, software vendor also slightly upped its revenue estimate, but lowered its earnings estimate, for its full 2004 fiscal year, which ends June 30, 2004.
Net income for the quarter ended Dec. 31 came to US$1.55 billion or US$0.14 a share, including equity compensation expenses of US$2.17 billion, or US$0.20 a share. In the year-earlier quarter, Microsoft reported net income of US$1.87 billion, or US$0.17 a share, including various charges totaling US$1.26 billion, or US$0.12 a share, the company said in a statement.
The earnings beat analysts' expectations. Excluding the compensation expenses, Microsoft earned US$0.34 a share for the quarter. Analysts polled by Thomson Financial had been expecting US$0.30 a share.
Revenue amounted to US$10.15 billion, up from US$8.54 billion in the year-earlier period. In October, the software vendor estimated second-quarter revenue would be between US$9.7 billion and US$9.8 billion.
Microsoft attributed the higher than expected revenue to consumer and corporate demand for PCs that exceeded its expectations, resulting in double-digit sales growth for Windows XP and Office products. In the quarter, the corporate IT market began to show signs of a recovery, with increased demand for both desktop and server products, Microsoft Chief Financial Officer John Connors said in the statement.
As a result of increased sales, Microsoft now expects its full 2004 fiscal year revenue to be between US$35.6 billion and US$35.9 billion. That is up a bit from the previous, increased estimate of full-year revenue between US$34.8 billion and US$35.3 billion that the company gave in October.
Microsoft slightly lowered its full-year earnings per share guidance, which it had increased in October when it announced its first-quarter results. The vendor now expects fiscal 2004 earnings per share to be between US$0.82 and US$0.83, including equity compensation expenses of about US$0.35. In October, it estimated 2004 earnings per share between US$0.86 and US$0.88.
For the quarter ending March 31, Microsoft expects revenue to be between US$8.6 billion and US$8.7 billion and earnings per share between US$0.23 and US$0.24, including equity compensation charges of about US$0.05, the company said.