Microsoft News Tracker

Microsoft beat Wall Street expectations today when it announced its fiscal 2Q08 results:

Microsoft Corp. said Thursday that earnings jumped 81% for the December quarter thanks mostly to strong sales of its Windows software, and the software giant raised its outlook for the full fiscal year ending in June.

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Microsoft said net income for the period ended in December rose to $4.7 billion, or 50 cents a share, from $2.6 billion, or 26 cents a share in the same period a year earlier. Meanwhile revenue rose 31% to $16.37 billion.

Analysts on average have been estimating Microsoft would post earnings of 46 cents a share, on $15.95 billion in revenue for the quarter, according to Thomson Financial.

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Based on strong second-quarter results, the company raised its outlook for the full fiscal year ending in June. Microsoft said it now expects earnings between $1.85 and $1.88 a share for the year, and revenue between $59.9 billion and $60.5 billion. Analysts have been expecting earnings for the full year of $1.81 a share, and revenue of $59.36 billion.

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The company said its client unit, which includes Windows, posted a 68% gain in revenue in the second quarter, to $4.34 billion.

Note that the big gain for Windows client is partially due to the large revenue deferral a year ago, When that is added back in, the client revenue growth was only 18% and overall revenue growth was 15% instead of 31%. Note also that foreign currency exchange rates added 3% to revenue overall.

Below are the segment breakouts with some brief commentary based on the 10-Q.

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