Yesterday, Microsoft reported an a 38% increase in net profit for the quarter ended June 30 compared to the same quarter a year earlier, but that didn’t stop the company’s shares from going down.
The company beat Wall Street’s expectations as it reported a net profit of $3.7 billion. Shares dropped 71 cents to $25.73 earlier today after closing at $26.44 yesterday.
The company said that growth will improve over the next year. It has already shown improvement in its Server Tools division, with a 32% operating income increase.
In the company’s largest business line, the Windows operating system for personal computers, operating profit rose 7 percent to $2.18 billion. The Home and Entertainment Division, which includes the Xbox console, narrowed its operating loss to $179 million.
Although profits dipped in some divisions, including the unit that includes the Office product line, the company was pleased with the quarterly results overall, said Chris Liddell, recently appointed chief financial officer, in an interview yesterday. The performance was “broad-based, really, across all the businesses,” he said.
Microsoft did see its share of expenses. In fact, sales and marketing expenses increased 15%, reaching $2.8 billion, up from $2.4 billion the previous year.
“Sales and marketing expenses were surprisingly high,” said Goldman Sachs analyst Rick Sherlund. “It was offset by non-operating income. Investors don’t like to see that.”
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
