Microsoft's Earnings Rise, Boosted by Database Software Sales

Microsoft Corp. (MSFT) posted a rise in quarterly net profit Thursday, boosted by a strong performance at its database software division.

The world's largest software maker reported a net profit of $3.48 billion, or 35 cents per diluted share, in its fiscal first quarter ended Sept. 30 versus a profit of $3.14 billion, or 29 cents per diluted share, in the year-ago period. Sales rose 11 percent to $10.8 billion in the quarter.

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Analysts, on average, had forecast Microsoft to report earnings per share of 31 cents on revenue of $10.7 billion, according to Reuters Estimates.

Microsoft posted sales and profit growth at its server and tools business, powered by strong sales of its database software platform, SQL Server, and solid demand for its Windows server software.

In after-hours trade, shares of Microsoft dropped slightly to $28.31 shortly after the report from a close of $28.35 on Nasdaq.

The stock has risen about 25 percent since June, soaring to a near-two-year high based on investor optimism that much-anticipated upgrades of its Windows operating system and Office software suite will soon pay dividends.

For the current quarter, Microsoft forecast diluted earnings per share of between 22 cents and 24 cents on revenue of $11.8 billion to $12.4 billion. The outlook factored in an 11-cent-per-share impact for revenue deferrals.

Analysts, on average, have forecast second-quarter earnings of 36 cents per share on sales of $13.4 billion, according to Reuters Estimates.

Microsoft is expected to launch Windows Vista, its first major operating system upgrade in five years, and Office 2007 for corporate customers during the quarter. It plans to introduce the new versions of Windows and Office to retail consumers early next year.

The two product lines together comprise more than half of Microsoft's revenue and almost all of its profit.

The company also gave a full-year earnings outlook range of $1.43 to $1.46 per share on revenue of between $50 billion and $50.9 billion. Wall Street analysts were calling for full-year profit of $1.44 per share on sales of $50.3 billion.

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