Microsoft revenue rise fails to meet predictions

Microsoft’s revenues for the second quarter rose 18% year on year to $15.84bn, but the software giant failed to meet analyst predictions, despite a 42% year-on-year increase in net income.

It is understood that analysts were disappointed that its $4.3bn net income was only equivalent to $0.46 per share. It is thought they were looking for $0.47 per share.

Microsoft chief financial officer Chris Liddell admitted that tough economic conditions were coming in the months ahead. He says: “Looking forward, despite difficult economic conditions, we will build upon the momentum exiting fiscal year 2008.”

In the three months to the end of June, Microsoft’s operating income increased to $5.7bn from $3.9bn a year ago, while earnings per share rose to $0.46, from $0.32 a year ago.

In a conference call, after Microsoft’s earnings report, Liddell reiterated the company’s interest in purchasing the Yahoo! search engine. He said Microsoft’s offer is “a compelling one”.

Yahoo! has swatted away Microsoft’s attempts to buy its search business. On July 12, Yahoo! rejected a joint proposal from Microsoft and Yahoo! investor Carl Icahn for a restructuring of Yahoo! that would include the acquisition of its search business by Microsoft.

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