Go Ahead and Sneer, But Microsoft’s Windows 8 Could be Huge
Have you heard about the hot tech item for 2012 -- it’s the PC. Walt Mossberg, the closely followed tech columnist at the Wall Street Journal and an Apple (AAPL) devotee by all accounts, told readers recently to hold off buying a new laptop until the fall when there should be an exciting set of new offerings using Microsoft’s (MSFT) anticipated Windows 8 operating system.
The new Windows seeks, among other advances, to challenge Apple’s touch-screen functionality. Microsoft has been riding the wave of a revival in the much-maligned PC this year, as its stock has surged ahead of the broader market.
Microsoft said shipments of PCs to businesses rose 8% and the PC market overall gained 2%-4% in its fiscal third quarter, which ended March 31. That’s faster than research firm Gartner had expected. For the first three months of 2012, Gartner had forecasted a 1.2% drop in PC shipments.
And while Microsoft warned Wall Street to expect higher expenses later this year to support Windows 8 and the new Office, it’s got lots of cash on hand to fund what some are calling the biggest product launch for the company in some time.
Overall, revenue rose 6% to $17.41 billion in the fiscal third quarter, beating expectations of $17.18 billion. While net income fell 2.4% to $5.11 billion, earnings per share of 60 cents for the quarter was above Wall Street’s forecast of 57 cents.
Sales at its Windows unit rose 4% to $4.62 billion, versus expectations of sales of $4.2 billion, notching the fastest quarterly growth rate since the September quarter of 2010. Operating income in the Windows division gained almost 6% to $2.95 billion.
Meanwhile, the Office software division posted a 9% jump in sales to $5.81 billion as ongoing demand for Office 2010 continues to surprise analysts this far into its lifecycle and with a new version on the horizon. Operating income jumped about 14% to $3.77 billion.