Microsoft sales and earnings drop less than expected

Deferral of operating system revenue ahead of the Windows 7 launch depressed results, but Xbox earnings sparkled

Microsoft reported revenue that was down 14 percent year-on-year for its first fiscal quarter, with net income down 17 percent -- but it still beat analyst expectations on both counts.

The figures were dragged down by deferral of revenue from sales of Windows 7 to PC manufacturers ahead of the operating system's launch on Thursday, the company said.

Overall revenue totalled US$12.92 billion for the quarter ended Sept. 30, down from $15.06 billion a year earlier. Net income fell to $3.57 billion, for earnings per share of $0.40, down from $4.37 billion a year earlier.

Analysts polled by Thomson Reuters had forecast revenue of $12.32 billion and EPS of $0.32.

The $1.47 billion in deferred revenue would not have been enough to maintain sales in the company's Windows and Windows Live division, where revenue fell $1.66 billion year on year, to $2.62 billion.

However, CFO Chris Liddell put a bright face on it.

"We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows," he said.

If Microsoft had not had to defer Windows 7 sales, profit would have gone up 8 percent, it said.

Sales in the Servers and Tools Division remained steady at around $3.4 billion, with operating income there up 23 percent to $1.28 billion while operating profit in the Entertainment and Devices Division, which makes the Xbox, doubled to $312 million on sales that were steady at $1.89 billion.

Join the Good Gear Guide newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Microsoftfinancial results

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?