“OPERATIONS STILL STRONG
Revenue was $7.25 billion, below expectations of about $7.34 billion but 13 percent higher than the $6.4 billion a year earlier. Much of the shortfall was due to slow sales of the company's Xbox video game console in Japan and Europe.
However, operating income was $3.3 billion, better than the $2.9 billion Microsoft had expected, and leading many analysts to say the quarter's results were better than they appeared at first blush.
``If you back off Expedia and the write-offs, they actually beat their numbers,'' said Brendan Barnicle, an analyst with Pacific Crest Securities.
``The first big initial (stock) sell-off was when people saw the numbers and everyone thought they missed the 51 cents. They actually blew away the quarter's numbers,'' Barnicle said.
Excluding the effects of the Expedia sale and AT&T charge, Microsoft's operating profit translated to 48 cents per share, above the 41 or 42 cents a share most analysts had looked for, said Scott McAdams, president of Seattle-based brokerage McAdams Wright Ragen.
``They actually did better than expected,'' McAdams said. ``Really, that's a pretty good showing in this environment.''”
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