Microsoft Q2 profit edges down on slow PC sales

REDMOND, WASHINGTON: Microsoft Corp on Thursday said its net income for the latest quarter edged down from a year ago, beating Wall Street's expectations despite the weak personal computer market.

Microsoft's net income for the quarter that ended in December was $6.63 billion, compared with $6.66 billion in the same period last year. Thanks to stock buybacks, net income rose to 77 cents per share from 74 cents.

That's better than Wall Street expected. Analysts surveyed by FactSet forecast net income of 69 cents per share for the fiscal second quarter.

Much of Microsoft's business depends on selling copies of the Windows operating system and Office desktop software. Revenue plunged 30 percent in the Windows division to $5.1 billion, in a quarter when worldwide personal computer shipments only grew about 3 percent.

However, the division that sells Office software, the Sharepoint online collaboration system and other business programs, saw revenue rise 24 percent to $6 billion.

Strength in the entertainment and devices division, which is responsible for Xbox 360, also helped make up for weak Windows sales. Microsoft says it sold 8 million of its new Kinect motion-sensing controller for the video-game system, helping push revenue for the segment up 55 percent to $3.7 billion.

In all, Microsoft's revenue edged up 5 percent to $20 billion, topping analysts' expectations for $19.2 billion in revenue. The software maker released its earnings report a few minutes early, just before the markets closed for the day. Investors sent shares down 25 cents, less than 1 percent, to $28.62 in extended trading. In the regular session, Microsoft's stock rose 9 cents to close at $28.87.