Product launch helps lift Microsoft profits

SEATTLE – Microsoft Corp. said earnings for its fiscal second quarter rose 5 percent, helped by the successful launch of a new server product and a healthy market for personal computers. As a result, it slightly nudged up its fiscal year profit and revenue guidance.

For the three months ended Dec. 31, the Redmond-based software maker reported earnings of $3.65 billion, or 34 cents a share, up from $3.46 billion, or 32 cents a share, in the same period of 2005.

The results included a one-time tax benefit of $108 million, or 1 cent a share. Without the one-time benefit, Microsoft met the expectations of analysts polled by Thomson Financial, who were projecting earnings of 33 cents a share on revenue of $11.96 billion.

Microsoft said revenue rose 9 percent to $11.84 billion, up from $10.82 billion in the same period last year.

The software maker raised its earnings guidance slightly for the fiscal year ending June 30. The company said it now expects to earn between $1.28 and $1.31 a share, up from previous guidance of between $1.26 and $1.30 a share.

Revenue for the full fiscal year is now expected to be between $44 billion and $44.5 billion, up from previous guidance of between $43.7 billion and $44.5 billion.

For the current third quarter that ends in March, the company said it expects to earn between 32 cents and 33 cents a share on revenue of between $10.9 billion and $11.2 billion.

For the six months ended Dec. 31, Microsoft said it earned $6.79 billion, or 63 cents a share, on revenue of $21.58 billion. That compares with earnings of $5.99 billion, or 55 cents a share, on revenue of $20 billion, in the same six-month period a year earlier.

Microsoft shares rose 10 cents to close at $26.50 in regular trading Thursday on the Nasdaq Stock Market. The results were announced after the markets closed. In after-hours trading, shares gained an additional 65 cents, or 2.5 percent.

In the past 52 weeks, its shares have traded between $23.82 and $28.85.