Microsoft Profit Falls 12%

Microsoft Corp.'s sales growth and profit continued to shift into the slow lane as net income fell 12% in the quarter ended in March.

Microsoft revenue rose 6.5% from a year earlier, thanks to the inclusion of sales from Nokia Corp.'s mobile-phone business, which Microsoft didn't own a year ago.

Microsoft in January cautioned its sales growth would slow through the summer, as the company ran out of steam for what had been enviable growth in sales of Windows, Office and other software sold to businesses. The company's stock price, and Wall Street's expectations for the company's financial results, have come down as a result.

Overall for the fiscal third quarter ended March 31, Microsoft reported net income of $4.985 billion, or 61 cents a share. That was down from net income of $5.66 billion, or 68 cents a share, a year earlier. The latest period included restructuring and integration related charges of a penny a share. Higher expenses than a year ago also dragged down profits.

Excluding some one-time items, Wall Street expected Microsoft to post earnings of 53 cents a share, according to Capital IQ.

Revenue was $21.73 billion, compared with the average of Wall Street analyst estimates for revenue of $21.06 billion, according to Thomson Reuters.

Like other big U.S. companies with a significant portion of sales abroad, Microsoft said the strong U.S. dollar would pare its revenue growth rate.

Tess Stynes contributed to this article.

Write to Shira Ovide at [e-mail]

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