The company said it earned US$3.14 billion or 29 cents per share, on revenue of US$9.74 billion for the three months ended Sepember 30, including the earnings hit caused by the RealNetworks settlement. The results compare to earnings of US$2.52 billion, or 23 cents per share, on revenue of US$9.19 billion for the same quarter a year ago. The year-ago figures include a charge for Microsoft's settlement with Novell.
Excluding the cost of the RealNetworks pact, Microsoft would have had earnings of 31 cents per share. Analysts were expecting the company to post earnings of 30 cents per share, excluding the legal costs, but including stock-based compensation charges, on revenue of US$9.78 billion, according to First Call. In July, Microsoft had forecast earnings of between 29 and 31 cents per share on revenue of US$9.7 billion to US$9.8 billion.
"We are optimistic about the company's future," said chief financial officer Chris Liddell, in a statement. Liddell also announced that the company plans to speed up its stock buyback program, with a goal of repurchasing the remaining US$19 billion by December 2006.
However, the company offered an outlook for the current quarter that was below what some analysts were forecasting. Microsoft said it expects revenue of US$11.9 billion to US$12 billion and per share earnings of 32 cents or 33 cents.
Analysts had been expecting earnings per-share of 35 cents per share, on revenue of US$12.29 billion, according to First Call.
For the just-ended quarter, Microsoft posted gains in sales and profits from its three main businesses -- Windows client, server and tools, and Information Worker units. The Microsoft Business Solutions and Mobile units both posted narrower losses on increased sales, while the home and entertainment unit, which includes the Xbox, saw its sales slip and loss widen ahead of the Xbox 360 launch later this year. MSN posted slightly higher sales and operating profits.
Shares of Microsoft slipped in after-hours trading following the report, changing hands recently at US$24.16, down more than 2 percent from their US$24.85 closing price.
For the full fiscal year, which stretches through June 30, Microsoft said it expects revenue in the range of US$43.7 billion to US$44.5 billion and per-share earnings in the range of US$1.26 to US$1.30, including the two-cent charge for the RealNetworks settlement.
Earlier on Thursday, Microsoft announced it was promoting Bob Muglia to head its Server and Tools unit, the latest in a series of moves that follow its September decision to reorganise the company into three units.
