Microsoft Q3 Profit Jumps 19% on 18% Increase in Revenue (MSFT)

After the closing bell on Thursday, software giant Microsoft Corporation (MSFT) reported a 19% rise in third quarter net income on 18% higher total revenues. The company’s earnings per share topped Wall Street estimates.

The Redmond, Washington-based company said its third quarter profit came in at $6.06 billion, or 72 cents per share, up 19% from $5.11 billion, or 60 cents per share, in the same quarter last year. This beat the analysts’ forecast that the company would earn 68 cents per share, according to FactSet.

Adjusting for certain items, which includes a $733 million fine by the European Commission, Microsoft earned 65 cents per share.

Total revenues for the quarter rose to $20.49 billion from $17.41 billion in the same quarter last year. This was below the analysts’ view that the company would see $20.56 billion in revenue.

Aiding the rise in total revenue was a 23% increase in revenue from the company’s Windows division, coming in at $5.70 billion. Also, the entertainment and devices division’s revenue spiked 56% to $2.53 billion. The company’s largest division, Business, saw revenue rise 8% to $6.3 billion.

Microsoft was able to beat estimates despite the continued decline in the PC market and the lukewarm reception to the company’s Windows 8 launch.

Looking ahead, the company revised its fiscal 2013 operating expense guidance to a range between $30.2 billion and $30.5 billion, down from the previous guidance of $30.3 to $30.9 billion.

Since 2009, Microsoft does not make profit and revenue forecasts due to market volatility.

Furthermore, the company announced that CFO Peter Klein will step down from his position after four years in the role and 11 years with the company. Microsoft said it will name a new CFO from within its finance team in the coming weeks.

Microsoft shares were up 66 cents, or +2.29%, during pre-market trading on Friday. The stock is up +7.79% year-to-date.

The Bottom Line
Shares of Microsoft Corporation (MSFT) have a dividend yield of 3.20% based on last night’s closing price of $28.79 and the company’s annualized dividend payout of 92 cents per share.

Microsoft Corporation (MSFT) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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