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Microsoft earnings top forecasts

A customer looks over clearance items at a Sears store in suburban St. Louis. Sears, Roebuck and Co. posted Thursday a $61 million loss in the third quarter. (Associated Press / The Spokesman-Review)
Associated Press
A customer looks over clearance items at a Sears store in suburban St. Louis. Sears, Roebuck and Co. posted Thursday a $61 million loss in the third quarter. (Associated Press / The Spokesman-Review)

Microsoft Corp. said its fiscal first-quarter earnings rose 11 percent, beating analysts’ expectations, as the company benefited from stronger-than-expected computer and server shipments.

For the three months ended Sept. 30, the Redmond company reported earnings of $2.90 billion, or 27 cents per share, compared with earnings of $2.61 billion, or 24 cents per share, in the same period a year earlier.

Analysts polled by Thomson First Call had been expecting earnings of 30 cents per share, with estimates between 29 cents and 32 cents per share, on revenue of nearly $9 billion.

Revenue was $9.19 billion, up 12 percent over $8.22 billion a year earlier.

Shares in Microsoft closed down 14 cents at $28.56 in trading Thursday on the Nasdaq Stock Market, more than $1 off its 52-week high of $29.89. The company reported earnings after the markets closed. In after-hours trading, the shares lost another 66 cents.

• Amazon.com on Thursday reported it had more than tripled its third-quarter net earnings, thanks to stronger sales in North America and internationally.

Amazon reported net income of $54 million, or 13 cents per share, for the quarter ended Sept. 30. For the same period a year ago, the company had profits of $16 million, or 4 cents per share.

Analysts polled by Thomson First Call, however, had predicted earnings between 15 cents to 20 cents, with an average of 18 cents a share on revenue of nearly $1.47 billion.

• Washington Mutual Inc.’s net income fell 34 percent in the third quarter amid lower mortgage refinancing activity.

The Seattle-based savings and loan company late Wednesday reported net income of $674 million, or 76 cents a share, compared with net income of $1.02 billion, or $1.11 a share, a year earlier. Year-earlier net included 2 cents a share in income from discontinued operations.

Washington Mutual’s net interest income — or income derived from lending — dropped 9 percent to $1.74 billion.

• Spokane-based Ambassadors Group Inc. announced Thursday a 42 percent increase in third-quarter earnings.

Ambassadors, which arranges student and professional trips in the U.S. and overseas, announced third-quarter earnings of $8.9 million, or 85 cents a share, compared with earnings of $6.1 million, or 60 cents a share, in the third quarter of 2003. For the nine months ended September 30, Ambassadors posted earnings of $19.8 million, or $1.90 a share, compared with earnings of $13.4 million, or $1.33 a share, in the like period a year ago.

• AT&T Corp. swung to a third-quarter loss of $7.12 billion due to huge charges from the company’s retreat from traditional telephone services, which included at least 7,500 more job cuts and a writedown in the value its long-distance network.

The loss reported Thursday amounted to $8.95 per share for the July-September period. The results, which topped more pessimistic analyst forecasts, reflect writedown and severance costs of $12.47 billion, as well as a resulting $4.38 billion tax benefit and after-tax savings of $331 million on depreciation thanks to the writedown.

• The Coca-Cola Co. reported a 24 percent drop in third-quarter profit on flat revenue, but beat analysts reduced expectations that were tempered after the beverage giant’s previous warnings.

For the three months ending Sept. 30, Coke said it earned $935 million, or 39 cents a share, compared to a profit of $1.22 billion, or 50 cents a share, a year earlier.