Microsoft's Windows 8 High But Profits Suffer
By Oonagh Reidy | Thursday | 24/01/2013
We're up: Microsoft revenue hits "record" as it sails high on Windows 8.
Quarterly revenue (Q2) to December 31 was up 5% to $21.46 billion for software giant.
The biggest news was the all-important Windows Division posted a 24% revenue increase to $5.88 bn, seilling over 60 million Windows 8 licenses - its make or break touch based OS - since October.
Net income was $6.38 billion for Q2 - a fall from the $6.62bn figure reported a year ago.
Operating income was $7.77 bn, a 3% rise, and earnings per share was $0.76. However, the figures disappointed some analysts who were predicting 75 cents a share on $21.56 billion revenue.
"Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers," said Steve Ballmer, CEO Microsoft.
"With new Windows devices, including Surface Pro, and the new Office on the horizon, we'll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need."
This is a vital quarter for Microsoft as it measures if its Windows 8 touch platform has been successful.
However, it did not reveal sales figures for its Surface Pro tablet, nor Windows 8 Phone, but "it's one part of the overall Windows story," said Lisa Nelson, Microsoft's director of investor relations.
Shares rose 0.07% to $28.07 on the Q2 news, although fell in afterhours trading.
BGC Financial analyst Colin Gillis said Microsoft's healthy figures show how "concern about the death of the PC are overdone."
|"They have a lot of very compelling businesses that are continuing to grow.|
"We're still selling close to a million PCs a day, but to focus on Microsoft's ties to PCs misses how diverse this company is."
Peter Klein, chief financial officer said there was " strong growth in our enterprise business driven by multi-year commitments to the Microsoft platform, which positions us well for long-term growth. "
Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and Microsoft's Business Division.
Microsoft's Server & Tools business reported a 9% lift in revenues to $5.19 billion driven by double-digit growth in SQL Server and System Center.
However, not all Microsoft divisions were up.
Microsoft Business Division revenue fell 10% to $5.69 bn and Entertainment and Devices Division fell 11% from Q2 2011 to $3.77 bn revenues.
Microsoft reaffirmed fiscal year 2013 operating expense guidance of $30.3 bn - $30.9 billion.
Apr/May 2011 issue
reviews the hot new iPhone attach device, the Zeppelin Air. And we look at what's going on in the tablet space...