Microsoft Corp (MSFT) $27.08 -1.67%

By Tiernan Ray

Microsoft (MSFT) this afternoon reported fiscal Q4 revenue and earnings per share ahead of estimates.

 

Revenue in the three months ended in June rose 8%, year over year,  to $17.37 billion, yielding 69 cents per share in profit.

Analysts had been expecting $17.25 billion and 58 cents per share.

Microsoft “Business Division” revenue was up 7% in the quarter, while “Server & Tools” revenue rose 12%. The Windows division saw a 1% decrease in revenue, going up against comparisons in the year earlier sales of Windows 7. “Online revenue” was up 17%, the company said, and “Entertainment & Devices” revenue, including XBox game system, rose 30%.

The decline in Windows division revenue was not as bad this quarter as the 4% decline in fiscal Q3, and much better than the 30% decline in fiscal Q2, suggesting that Microsoft has passed some of the toughest quarters for year-over-year comparisons since the introduction of Windows 7 in late 2009.

Microsoft shares are up 59 cents, or 2%, at $27.68 in late trading.

Microsoft reaffirmed an outlook for operating expense growth of 3% to 5% in the current year, to a range of $28 billion to $28.6 billion.

Microsoft’s conference call with analysts starts at 5:30 pm, Eastern, and you can catch it here.

Update: Microsoft shares are down 20 cents, or 0.8%, at $26.89 in late trading.

Update 2: I am already hearing some tax-rate grumbling on the Street, as Microsoft’s tax rate in the quarter continued to decline from prior quarters. Tax was 7% this quarter, down from 13% in the prior quarter and 25% in the year-earlier quarter, mostly because more of Microsoft’s income is coming from overseas, where rates are lower.

Hence, despite a mere 4% rise in operating income in the quarter, net income rose by 30%.