Microsoft reports best-ever Q1 results; revenue hits $17.37 billion

Microsoft announced its fiscal first-quarter 2012 earnings on Thursday, the best first quarter the company has ever recorded. The Redmond-based software giant reported revenue of $17.37 billion, up 7% from the first quarter of 2011 and on a par with analyst estimates of $17.26 billion. Operating income for the quarter was $7.2 billion, up 1% from the same quarter last year and net income was $5.74 billion, or $0.68 per share, up 6% from the first quarter of 2011. “We saw customer demand across the breadth of our products, resulting in record first-quarter revenue and another quarter of solid EPS growth,” said Microsoft CFO Peter Klein. “Our product portfolio is performing well, and we’ve got an impressive pipeline of products and services that positions us well for future growth.” Microsoft’s Business division reported $5.62 billion in revenue, up 8% from the same period last year and above analyst estimates of $5.4 billion. The company’s Server & Tools team reported $4.25 billion in revenue, up 10% from last year’s first quarter and a hair below analyst expectations of $4.3 billion. Its Windows and Windows Live Division reported a revenue increase of 2% up to $4.87 billion. In addition, Microsoft said it has now sold 450 million Windows 7 licenses since the platform’s launch. Read on for the full press release from Microsoft. 

Microsoft Reports Record First-Quarter Results 

$17.37 billion of revenue driven by solid business and consumer demand

REDMOND, Wash. — Oct. 20, 2011 — Microsoft Corp. today announced record first-quarter revenue of $17.37 billion for the quarter ended Sept. 30, 2011, a 7% increase from the same period of the prior year. Operating income, net income, and diluted earnings per share for the quarter were $7.20 billion, $5.74 billion, and $0.68 per share, which represented increases of 1%, 6%, and 10%, respectively, when compared with the prior year period.

“We saw customer demand across the breadth of our products, resulting in record first-quarter revenue and another quarter of solid EPS growth,” said Peter Klein, chief financial officer at Microsoft. “Our product portfolio is performing well, and we’ve got an impressive pipeline of products and services that positions us well for future growth.”

Since July, Microsoft reported a number of product and business highlights, including:

  • The Microsoft Business Division reported $5.62 billion in first quarter revenue, an 8% increase from the prior year period which included the launch of Office 2010. Revenue from Microsoft’s productivity server offerings – including Lync, SharePoint, and Exchange – grew double-digits, and the Dynamics business grew 17% in the quarter.
  • The Server & Tools segment posted $4.25 billion in first quarter revenue, a 10% increase over the prior year period and the sixth consecutive quarter of double-digit revenue growth. Microsoft also unveiled a developer preview of “Windows Server 8” at the BUILD developer conference in September.
  • Windows and Windows Live Division revenue was $4.87 billion, a 2% increase over the prior period, in line with the PC market. Windows 7 momentum continued with over 450 million licenses sold since launch. At the BUILD conference, Microsoft showcased and released a developer preview of the next major release of Windows, “Windows 8.”
  • Windows Phone 7.5 released with a broad array of new features, and received favorable reviews.
  • Bing organic US market share grew 350 basis points year over year to 14.7% while Bing-powered US market share, including Yahoo! properties, was approximately 27%. The company also showcased the increasing integration of Bing across other products such as Xbox and Windows Phone.
  • Xbox was the top-selling gaming console in the US for the ninth consecutive month. The company launched the Gears of War 3 game with over three million copies sold in the first week, and announced plans to roll out the next generation of TV entertainment on Xbox LIVE with nearly 40 content providers starting this holiday season.
  • Microsoft completed its acquisition of Skype.

“We had another strong quarter for Office, SharePoint, Exchange, and Lync, and saw growing demand for our public and private cloud services including Office 365, Dynamics CRM Online, and Windows Azure,” said Kevin Turner, chief operating officer at Microsoft. “With a great set of consumer products like Windows 7 PCs, Windows Phone 7.5, Xbox and Kinect, we are excited about the holiday buying season.”

Business Outlook

Beginning in the second fiscal quarter, Microsoft’s results will include the results of Skype. The company offers updated fiscal 2012 operating expense guidance, including Skype and the associated acquisition-related expenses, of $28.6 billion to $29.2 billion.

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