Flash: Microsoft prelim $0.56 ex-$0.05 tax benefit, vs $0.56 Thomson Reuters consensus; revs $16.43 bln vs $16.19 bln Thomson Reuters consensus

Reports Q3 (Mar) earnings of $0.61 per share, including a $0.05 tax benefit primarily related to an agreement with the IRS to settle a portion of their audit of tax years 2004 to 2006, $0.05 better than the Thomson Reuters consensus of $0.56; revenues rose 13.3% year/year to $16.43 bln vs the $16.19 bln consensus. Microsoft Business Division revenue grew 21% year-over-year. Server & Tools revenue grew 11% year-over-year, the fourth consecutive quarter of double-digit growth. Online Services Division revenue grew 14% year-over-year primarily driven by increases in search revenue. Bing’s US search share increased to 13.9% this quarter. Entertainment & Devices Division grew 60% year-over-year, fueled by Kinect for Xbox 360, the fastest-selling consumer electronics device in history, continued strong Xbox 360 console sales and growth of Xbox Live. Microsoft reaffirms operating expense guidance of $26.9 bln to $27.3 bln for the full year ending June 30, 2011. Microsoft also offers preliminary FY12 operating expense guidance of 3% to 5% growth from the mid-point of fiscal year 2011 guidance, or $28.0 bln to $28.6 bln. “Office had another huge quarter, again exceeding everyone’s expectations, and the addition of Office 365 will make our cloud productivity solutions even more compelling. We continue to see strong adoption of our cloud-based services among the Fortune 500.”