October 25, 2013 in Business

Microsoft results easily beat 1Q forecasts

From Wire Reports
 

Microsoft posted quarterly revenue and earnings Thursday that easily topped Wall Street forecasts, marking a healthy start to a companywide overhaul it announced in July that should help the software giant transform into a devices and services company.

Its stock rose nearly 6 percent in after-hours trading.

“Our devices and services transformation is progressing,” CEO Steve Ballmer said in a statement with the company’s fiscal first-quarter results. Ballmer said in August he’ll step down within 12 months and the search is on to find his successor.

Microsoft’s net income in three months through Sept. 30 grew 17 percent to $5.24 billion, or 62 cents per share, from $4.47 billion, or 53 cents per share, a year ago.

That beat the 54 cents expected by analysts polled by FactSet.

Revenue rose 16 percent to $18.53 billion, also beating the $17.79 billion analysts were expecting.

Microsoft’s revenue from its Surface tablets hit $400 million, representing a gain in revenue and more than a doubling of unit sales from the quarter that ended in June, helped by a price cut to its slimmed down Surface RT model in July. Profitability in the division that houses Surface fell, mainly because the cost of making Surface tablets rose by $645 million from a year ago.

Amazon revenue up, earnings loss smaller

Amazon.com’s revenue rose more than Wall Street expected in its fiscal third quarter, but the online retailer posted another loss due to ongoing investments in its business.

Steady profits have proven elusive for the world’s largest online retailer as it spends heavily on filling orders, marketing and technological improvements and innovations. But investors were cheered by its revenue forecast for the fourth-quarter, a sign of confidence and optimism as it enters the key holiday shopping season. Shares rose 8 percent in after-hours trading.

The Seattle-based company posted a loss of $41 million, or 9 cents per share, for the quarter that ended in September, matching analyst expectations. That compared with a loss of $274 million, or 60 cents per share, in the same quarter last year. The prior year includes a one-time $169 million loss related to its stake in online deals site LivingSocial.

Revenue jumped 24 percent $17.09 billion from $13.81 billion. Wall Street predicted $16.76 billion, according to FactSet.

Amazon said it expects revenue for its fourth quarter to fall between $23.5 billion and $26.5 billion, bracketing analysts’ prediction of $25.88 billion.

30-year mortgage rate dips to 4.13 percent

WASHINGTON – Average U.S. rates on fixed mortgages dropped this week to their lowest levels in four months, a positive sign for the housing recovery.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 4.13 percent. That’s down from 4.28 percent. The average on the 15-year fixed loan declined to 3.24 percent from 3.33 percent.

Both averages are the lowest since June 20.


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