Microsoft 3Q profit falls 11 per cent

Microsoft's net profit for the three months ended March 31 falls to $4.39 billion from $4.93 billion in the same period last year.

Microsoft Corp said its fiscal third-quarter profit fell 11 per cent from a year earlier, when the software maker reported more than $1 billion in deferred revenue tied to delays in the launch of the Windows Vista operating system.

HT Image

Microsoft said its net profit for the three months ended March 31 fell to $4.39 billion, or 47 cents per share, from $4.93 billion, or 50 cents per share, in the same period last year.

The results still beat Wall Street's expectations. Analysts surveyed by Thomson Financial forecast a profit of 44 cents per share.

But investors, chewing over the company's guidance and a drop in sales in the division that produces the flagship Office productivity programs, sent shares down $1.43, or 4.5 per cent, to $30.37 in after-hours trading.

Earlier in the day, the stock had gained 35 cents, or 1.1 per cent, to close at $31.80.

Revenue edged up to $14.45 billion from $14.4 billion in the year-ago quarter. Analysts were looking for $14.4 billion in sales.

"Despite a difficult economic environment, it was a very good performance," said Chief Financial Officer Chris Liddell in an interview.

Stronger-than-expected PC shipments in the quarter could not offset the $1.67 billion in deferred Vista revenue booked in the 2007 quarter. Sales in the division responsible for Windows fell 24 per cent to $4.