Microsoft did not blow away the quarter but the fact that it nearly met expectations constituted good news after a rough week for tech stocks. Microsoft logged earnings per share (EPS) of $0.53 on revenue of $16 billion, missing estimates of $0.57 EPS on revenue of $16.4 billion. GAAP revenue was down 8 percent compared to the year-ago figure of $17.38 billion and EPS of $0.68.
As is usual in a big upgrade year, Microsoft deferred revenue of $1.36 billion in revenue ($0.13 per share) to cover the transition to the Windows 8 operating system which will debut next week. Without the deferrals, EPS would have been $0.65 on revenue of $17.4 billion.
Intel’s earnings indicated that the appetite for PCs remains low and that bodes ill for Windows 8 — and Microsoft. No one needs a new operating system unless they buy a new PC and it sure doesn’t look like there will be a lot of new PCs selling next quarter. HP(s hpq) and Dell(s dell) are also feeling this pain.
The consensus estimates for Microsoft’s first quarter ending September 30, fell from 60 cents a share to the current estimate of earnings of 57 cents a share over the past few weeks.