Microsoft profit rises

Microsoft Corp's quarterly profit rose 6 percent, meeting Wall Street's modest expectations, helped by strong sales of its popular Office applications package, but limited by only slight gains from its flagship Windows operating system. Windows sales edged up only 2 percent from the year-ago quarter, in line with limp personal computer sales last quarter. While the rise in Windows sales broke the streak of three straight quarters of declines, it fell short of some analysts' hopes.
The brightest spot for the world's largest software company was an indication that its perennially money-losing online services unit - including the MSN Internet portal and Bing search engine - may have turned a corner. The unit lost $494 million in the quarter, the lowest loss in the last seven quarters, slowing the flood of red ink that has cost Microsoft more than $5 billion since it launched Bing in mid-2009, as it invests heavily to catch up with Google Inc. The Redmond, Washington company reported fiscal first-quarter net profit of $5.74 billion, or 68 cents per share, up from $5.41 billion, or 62 cents per share, a year ago. That met Wall Street's average estimate, according to Thomson Reuters I/B/E/S. It is the first time in 10 quarters that Microsoft has not exceeded the average estimate.
Overall sales rose 7 percent to $17.37 billion, helped by Office, which remains popular with businesses even in the difficult global economy. The Office unit posted an 8 percent gain in sales to $5.6 billion, making it Microsoft's biggest-selling and most profitable unit. The server and tools unit, which sells the server software behind the datacenters enabling "cloud" or Internet-based computing, rose 10 percent to $4.2 billion, but even that fell short of some analysts' expectations for the fast-growing area of the technology market.
The entertainment and devices unit posted a 9 percent gain in sales, helped by the Xbox, which remains the most popular game console in the United States. Microsoft now has a cash hoard of $57 billion, most of which is parked overseas. Faster-growing rival Apple Inc on Tuesday reported it has $81 billion in cash.