Software giant Microsoft Corp. announced that fiscal third-quarter earnings rose 35 percent, mostly on robust sales of the Windows 7 operating system, offering investors a sign that corporate IT spending is finally picking up after being dormant for almost two years.
For the quarter ended March 31, Microsoft reported $4.01 billion in profit, for 45 cents per common share. The results beat analyst expectations of 42 cents per share—expected by analysts polled by Thomson Reuters. The $4 billion net income was 35 percent higher than its results from the prior year.
Revenues also rose for the Redmond, Wash.-based company, increasing 6 percent to $14.5 billion for the quarter.
Microsoft's fortunes are deeply tied to the number of personal computer shipments, and data from industry research firm Gartner Inc. showed that first quarter PC shipments gained 27 percent from the same period a year ago. The positive results are another sign that consumers are opening their wallets to purchase new computers.
Revenues for Microsoft's online business increased to $566 million but it continues to be a loss-making segment for the company. Its business software and entertainment divisions, which makes the Xbox 360 video-game console, remained relatively flat for the period.
Despite the favorable results, investors failed to be impressed, sending its shares down nearly 4 percent in after-market trading on Thursday evening.