The long-delayed launch of the Windows Vista operating system cut into fiscal second-quarter profit at Microsoft Corp., which reported a 28 percent drop in earnings yesterday despite revenue growth.
In the last three months of the year, earnings fell to $2.63 billion, or 26 cents a share, from $3.65 billion, or 34 cents a share, during the same period a year earlier.
Analysts polled by Thomson Financial had expected the Redmond, Wash., software-maker to post a profit of 23 cents a share.
Revenue rose to $12.5 billion, a 6 percent gain from $11.8 billion in the year-earlier quarter. Analysts were expecting just shy of $12.1 billion in sales.
Microsoft shares fell 64 cents, or 2.1 percent, to close at $30.45 yesterday on the Nasdaq Stock Market, ending an uneven day in which the stock also hit a 52-week high of $31.48. In extended trading after the earnings release, the stock rose to $31.45.
Although Windows Vista and Office 2007, the latest editions of Microsoft's flagship products, are not available to consumers until Tuesday, businesses have been able to buy them since Nov. 30, two-thirds of the way through the Microsoft's second quarter.
Even so, Microsoft's "client" division, responsible for Windows, posted a 25 percent drop in sales to $2.59 billion. And the business division, which includes Office, had a 5 percent drop to $3.51 billion.
The falls were expected; Microsoft had warned that it would defer $1.6 billion in Windows and Office revenue from the second quarter to the current period. That was done to account for coupons that recent computer buyers could use to upgrade existing software to Vista and Office.
Besides the revenue deferral, Microsoft's profit was trimmed $1.13 billion, or 11 cents a share, because of the upgrade-coupon program.