Microsoft Up

Microsoft, the maker of the Windows operating system — including the new Windows 7 version released Thursday — reported net income of $3.57 billion, or 40 cents a share, for the quarter, which ended Sept. 30. Wall Street had expected Microsoft to earn 32 cents a share, according to a Thomson Reuters survey. “They are really serious about cost-cutting,” said Brendan Barnicle, an analyst with Pacific Crest Securities. “It signals there has been a change in culture that is meaningful.” Microsoft attributed part of its rebound to increasing sales of personal computers by consumers. While total PC sales were essentially flat in the quarter, compared with a year earlier, consumer sales worldwide jumped by a percentage that was “in the mid-single digits,” Bill Koefoed, Microsoft’s general manager of investor relations, said on a conference call Friday. Those gains came despite the growth of netbooks, small laptop computers, which have typically used inexpensive versions of Windows XP. Netbooks represented 12 percent of sales to consumers in the quarter, Microsoft said. The company was bullish on Windows 7, in part because of vigorous advance sales. Indeed, the company deferred $1.47 billion in revenue from presales. Without that deferral, Microsoft said it would have earned 52 cents per share in the first quarter instead of 40 cents. The financial results were released before the market opened, and investors pushed Microsoft’s shares up more than 5 percent Friday, to $28.02. “We expected to see some positive impact from Windows 7, but this is the first time it’s been crystallized in the numbers,” said Kevin Buttigieg, a technology analyst at FTN Equity Capital Markets.