Microsoft Defies Weak PC Market

Yesterday after market close, Microsoft reported better than expected results for the three months that ended March 31.

Despite slumping PC sales, Microsoft's third quarter profit rose 19 percent to reach $6.1 billion. Driven by 23 percent growth in its Windows division, the company's revenue grew 18 percent to $20.5 billion.

The strong growth of Microsoft’s Windows division was mainly fuelled by the delayed recognition of revenue related to an update offer to Windows users last fall. Without that deferred revenue, the Windows business would have been flat and overall revenue growth would have been significantly weaker.

It remains to be seen how strongly the weak PC market will affect Microsoft’s results in the mid to long term, as yesterday’s results conceal the many challenges the company is currently facing.