By John Letzing, MarketWatch
SAN FRANCISCO (MarketWatch) -- Microsoft Corp. on Thursday reported gains in profit and sales for its fiscal fourth quarter that topped Wall Street estimates, thanks to improving demand for computers loaded with the company's software.
Microsoft /quotes/comstock/15*!msft/quotes/nls/msft (MSFT 25.78, -0.06, -0.23%) said net income for the period ended in June rose to $4.5 billion, or 51 cents a share, from $3 billion, or 34 cents a share in the same period last year. Redmond, Wash.-based Microsoft said revenue rose to $16.04 billion from $13.1 billion. Analysts polled by FactSet Research had expected Microsoft to report earnings for the quarter of 46 cents a share, and $15.2 billion in revenue.
"We saw strong sales execution across all of our businesses," Microsoft Chief Operating Officer Kevin Turner said in a prepared statement.
Shares of Microsoft rose nearly 3% to $25.83 in after-hours trading, following the earnings announcement.
Wall Street had generally expected an upbeat earnings report from Microsoft, which released the latest version of its Windows software late last year and has cited strong demand for the new product.
In addition, Microsoft's report followed positive earnings news from long-time partner Intel Corp. /quotes/comstock/15*!intc/quotes/nls/intc (INTC 21.63, -0.15, -0.69%) , and upbeat data on personal-computer shipments during the quarter.
Microsoft said its fourth-quarter Windows revenue rose to $4.5 billion, compared with $3.2 billion in the same period last year. Profit for the Windows unit rose to $3 billion from $1.9 billion, the company said.
Revenue for Microsoft's Business division, which includes its Office suite of software, rose to $5.3 billion from $4.6 billion. Profit at the division rose to $3.3 billion from $2.7 billion.
Microsoft's Online Services division, traditionally a money-loser for the company, saw fourth-quarter revenue rise to $565 million from $501 million - while the unit's loss grew to $696 million from $585 million.
Online advertising revenue rose 19% compared to the same quarter last year, to $494 million, Microsoft said.
Microsoft has a partnership in place with Yahoo Inc. /quotes/comstock/15*!yhoo/quotes/nls/yhoo (YHOO 13.85, -0.03, -0.22%) , which has the companies teaming to gain ground on Google Inc. /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 482.15, -2.66, -0.55%) in the Internet search market.
Under the terms of the deal, Microsoft will assume control of the inner workings of Yahoo's search engine as soon as the end of this year, in a revenue-sharing arrangement.
Microsoft's general and administrative costs dipped to $987 million in its fourth quarter, compared to $1.1 billion in the same period last year.
John Letzing is a MarketWatch reporter based in San Francisco.