Microsoft (NASDAQ: MSFT) exceeded analysts' predicted estimates for profit, but fell just slightly short of revenue forecasts in its latest quarterly results -- a quarter that also saw a sharp decline in PC sales worldwide.
For its fiscal third quarter, which ended March 31, Microsoft posted a profit of $6.06 billion, or 72 cents a share, on revenue of $20.49 billion.
That's a 19 percent increase in profit and 18 percent increase in revenue from the same quarter last year. The figures are also records for third-quarter revenue and third-quarter earnings per share.
"Overall, we're super happy with the results," said Lisa Nelson, Microsoft director of investor relations. "Our results reflect our diversified portfolio. Even in a quarter when we're transitioning through the device market, we're delivering those results."
Analysts' consensus estimate for Microsoft's third quarter was earnings per share of 68 cents on revenue of $20.66 billion.
In its release on the quarter's results, the company also announced that Chief Financial Officer Peter Klein will be leaving Microsoft at the end of the fiscal year at the end of June. The company said it will name a successor in the next several weeks.
Klein has been with Microsoft for 11 years, nearly four of them as CFO.
Wall Street analysts had been revising downward their estimates for Microsoft's quarterly numbers, especially in light of recent reports of PC sales declines.
Research firms IDC and Gartner had reported that PC sales saw their steepest drop in years, plunging 11 to 14 percent in the first three months of 2013, compared with the same quarter last year.
But Microsoft's traditional strength among large business customers again carried the company through.
Microsoft's third-quarter figures reflect a recognition of deferred revenue related to upgrade offers for Windows and Office and a video game deferral. Those figures were partially offset by a $733 million fine from the European Comission for not carrying through on a commitment to provide a browser choice screen in some PCs sold in the EU.
Here's how Microsoft's divisions did:
Windows and Windows Live: $5.70 billion revenue, a 23 percent increase from last year. Adjusting for the recognition of revenue related to the Windows upgrade offer, though, revenue was flat.
"Clearly, Windows has been impacted by the declining [PC] market," Nelson said. "But that market is evolving beyond the traditional x86 to devices that are more mobile and touch-centric, which Microsoft is well positioned in with Windows 8, and is net new opportunity for us."
Microsoft did not provide any updated figures on sales of Windows 8 or its Surface devices.
Business customers continued to provide good news for Microsoft, with double-digit growth in volume licensing, in which businesses sign three-year commitments to Windows. Those deals are on pace toward generating $4 billion in revenue this fiscal year.
Business (includes Office, Lync, SharePoint, Exchange, Dynamics) $6.32 billion revenue, an 8 percent increase. Revenue from business, as opposed to individual customers, grew 10 percent. Multi-year licensing revenue grew 16 percent.
Office 365, Microsoft's subscription service version of its traditional productivity suite, is on pace to become a $1 billion business by the end of the fiscal year, said Nelson, who added that it's exceeded expectations.
Server and Tools (includes Windows Server, SQL Server, Windows Azure, Visual Studio, System Center, Windows Embedded): $5.04 billion revenue, an 11 percent increase.
Most of that increase was driven by multi-year licensing revenue, which was up 20 percent. Both SQL Server and System Center continued to do well, with revenue for the former up 16 percent and for the latter up 22 percent.
Entertainment and Devices (includes Xbox, Windows Phone, Skype): $2.53 billion revenue, an increase of 56 percent. Adjusting for the recognition of revenue from a video game deferral related to upgrades or enhancements the company hadn't yet delivered in the second quarter, revenue was up 33 percent for the quarter.
Xbox Live now has 46 million members, up 18 percent from the year-ago period.
Online Services (includes Bing, MSN): $832 million revenue, an 18 percent increase. The loss for the quarter was $262 million, down from the $480 million loss a year ago.
Microsoft shares were trading after hours at $29.47 after ending the regular trading day at $28.79, down 3 cents.
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