Power of seven helps Microsoft profits rise

Jul 24 2010 by Iain Laing, The Journal

SOFTWARE giant Microsoft has posted a big rise in quarterly profits amid signs of a rebound in technology spending by corporate customers.

Revenues hit £10.5bn in the second quarter, an increase of 22%, as profits jumped 48% to £3bn.

The results, which were stronger than Wall Street had expected, were helped by strong sales of Office 2010 as revenues from the company’s business software segment rose 15% to £3.5bn.

Microsoft added that more than 175 million Windows 7 licences had been sold since its launch last year.

It said there were signs that its corporate customers were starting to spend again after billings for its multi-year agreements with big companies increased in the quarter.

While Microsoft has followed chipmaker Intel and Apple in pleasing investors with its second-quarter figures, there was no such reaction for online retailer Amazon after its earnings figure came in below expectations.

Revenues were in line with hopes following growth of 41% to £4.3bn, but this was offset by a 40% rise in operating expenses as Amazon earned £135.7m, an increase of 45%.

The revenues growth came mainly from sales of electronics and other general merchandise, which increased 69% from last year to £2.3bn.

Revenues from books, CDs, DVDs and other media rose 18% to £1.9bn.