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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

October 23, 2009 at 6:05 AM

Microsoft earnings: Sales decline, profit better than expected

NEW YORK — While Microsoft’s sales continued to fall in financial results, the software company reported profits that exceeded expectations.

The company said it made $12.92 billion in sales in the first quarter of 2009, a 14 percent decline compared to $15.06 billion in sales in the same period a year ago. Because of cost savings, profit was above what analysts were expecting — $3.57 billion, or 40 cents per share, an 18 percent decline from $4.37 billion a year ago. Analysts had been expecting profit of 32 cents per share.

Sales were affected by the Windows 7 upgrade option Microsoft offered to customers who bought a PC before the operating system began selling on Thursday. The company has deferred that revenue, $1.47 billion. If the financial results had included those sales, the revenue would have been $14.39 billion, a 4 percent decline from th same period a year ago, and the company would have made 52 cents per share, and increase of 8 percent from the same period a year ago.

The company will hold a conference call to discuss earnings at 7:30 a.m. Here is a link to the earnings release.

Update 6:42 a.m.: The market likes what it’s seeing in early trading. The stock, which closed at $26.59 at the end of Thursday, has risen more than 8 percent this morning to more than $28.90.

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