Microsoft enjoys record financial results
After all the pessimism comes the reality of Microsoft’s latest financial results. Should we be optimistic once again?
Microsoft has come in for some major criticism over the past year or so. Many people, both professional analysts and amateur industry watchers think the company is set to slowly die as the world moves on to pastures new. And it’s a compelling argument that is rather easy to buy in to.
Let’s face it, Microsoft is struggling to evolve to the new reality where the PC may not be king for much longer. Where we are all connected all the time, with Web-enabled mobile devices ruling the roost. Where Apple is the new Microsoft, with an ability to print money thanks to ubiquitous products and a strong brand. But Microsoft’s obituary may still have been written a little too early.
The Redmond-based company today announced its Q1 FY 2011 (ending Sept. 30) financial results, and it’s fair to say they are rather impressive.
Revenue for the quarter came in at $16.20 billion, beating the Wall Street estimate of $15.80 billion. This is a huge 25 percent increase on the same period last year when revenue was $12.9 billion. Net Income came in at $5.41 billion, a 51 percent increase over the $3.57 of the previous year. Earnings per share were 62 cents, again higher than the Wall Street estimate of 55 cents.
Peter Klein, chief financial officer at Microsoft, said:
This was an exceptional quarter, combining solid enterprise growth and continued strong consumer demand for Office 2010, Windows 7, and Xbox 360 consoles and games. Our ability to grow revenue while continuing to control costs allowed us to deliver another quarter of year-over-year margin expansion.
As Klein states, Windows 7, Office 2010, and the Xbox 360 have all been huge successes over the past few months. The only blip seems to be Microsoft’s Online Services Division, as although Bing continues to increase its market share, the division as a whole lost $560 million over the quarter, an increase over the same period a year ago.
I imagine Steve Ballmer is going to be a very happy man this evening thanks to these results. And they do suggest all the pessimism is a little OTT at this stage. However, longterm Microsoft still has several very big issues to address if it hopes to keep operating at this level.
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