Microsoft Corp. (NYSE:MSFT) fared better than expected in its fiscal third quarter despite analysts who believed falling personal-computer sales would affect the company's revenue and earnings more than they did.
The Redmond, Wash., company reported its Q3 figures Thursday, announcing net income of $6.06 billion and earnings per share of 72 cents. Microsoft not only saw an increase in profit -- the company posted income of $5.11 billion and EPS of 60 cents in the year-earlier period -- but also beat estimates by Wall Street analysts polled by Thomson Reuters who forecast earnings of $5.78 billion and EPS of 68 cents.
The company saw revenue of $20.5 billion, which was accurately estimated by analysts. This indicated an 18 percent increase from a year ago but was an 8 percent increase when considering deferred revenue.
Despite concerns of Microsoft's rapidly decreasing PC sales, which fell 13 percent globally in the first three months of 2013, the Windows devision saw a 23 percent increase in revenue to $5.7 billion, more than 10 percent higher than was expected. In comparison with the $4.62 billion in revenue attained a year ago, the increase is significant.
The company credits this to an influx of PCs bought prior to the release of its Windows 8 operating system, which debuted in October 2012. Additionally, the company recognized $1.1 billion in deferred revenue from consumers who bought Windows 7 PCs June 2 or later and were able to take advantage of Windows 8 upgrade deals.
Other divisions also saw revenues increases, including entertainment and devices to $2.53 billion, online services to $832 million and business to $6.32 billion.
Microsoft discussed its future plans, which includes the release of new devices in "coming months" that will be available at competitive prices. This likely involves Barnes & Noble's Nook brand tablets, as Microsoft has taken a large stake in the popular book retailer.
Microsoft CFO Peter Klein announced his impending resignation at the end of the fiscal year in June. Neither he nor Microsoft have given a reason for his departure; however, the company plans to name a new CFO from its finance team in the coming weeks. Klein served as CFO for four years and worked with the company for 11 years.
Fionna Agomuoh is a Technology Reporter for the International Business Times, a vegan foodie, and a lover of Electric Dance Music.