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Microsoft (MSFT) Q2 Tops Expectations Yet Shares Off

 January 24, 2013 04:17 PM

(By Balachander) Software major Microsoft Corp. (NASDAQ: MSFT) reported better-than-expected earnings and revenue for the second quarter, yet its shares dropped 1.70 percent in extended trading on Thursday.

On an adjusted basis, the company posted earnings per share (EPS) of 81 cents on revenue of $22.00 billion. Wall Street analysts, on average, expected EPS of 75 cents on revenue of $21.53 billion for the second quarter.

GAAP EPS were 76 cents on revenue of $21.45 billion, compared with 78 cents on revenue of $20.88 billion in the same period of last year.

Results for the second quarter reflect the deferral of $1.33 billion of revenue and $0.13 of EPS, due to the Windows Upgrade Offer, Office Upgrade Offer and Pre-sales, and Video Game Deferral, the company said.

[Related -Microsoft Corporation (MSFT) Earnings Preview: What To Watch In Q2 Results?]

Revenue at the company's Windows division grew 24 percent. Revenue recognized for Windows 8 pre-sales was $783 million in the second quarter.

Microsoft said it has sold over 60 million Windows 8 licenses to date.

The world's largest software company has been experiencing slowing Windows sales for the four consecutive quarters on a year-over-basis and the reception to Windows 8 since its launch last year has been tepid.

Revenue at the company's business division fell 10 percent, while increasing 3 percent on a non-GAAP basis.

Entertainment and devices division revenue declined 11 percent.

[Related -Microsoft Corporation (MSFT): Good Buy or Good-Bye?]

In the preceding first quarter, MSFT earned 65 cents a share on revenue of $17.4 billion.

The stock, which has been trading between $26.26 and $32.95 over the past year, ended Thursday's regular trading at $27.63.

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