Microsoft Quarterly Results Boosted by Windows, Xbox, Office

Healthy sales of Windows 7, Office 2010 and Xbox 360 consoles propelled Microsoft to US$5.41 billion in net income for its first fiscal quarter of 2011, a 51 percent increase from the same period a year before.

The company also reported a 25 percent increase in revenue for the quarter, or $16.20 billion for the quarter that ended Sept. 30. This figure exceeds what many analysts had expected the company to generate for the time period: A poll from Yahoo Finance found that analysts, on the average, expected the company to earn around $15.80 billion for the quarter.

Overall, sales of the Microsoft Office productivity suite grew by 15 percent, thanks to the June 2010 release of the new version, Office 2010. Xbox 360 consoles sales grew by 38 percent, and the company also noted that the PC refresh cycle continues to drive Windows 7 sales.

"We are seeing improved business demand and adoption. Our enterprise agreement rates were strong, reflecting business commitment to Windows 7, Office 2010, and our server and database products," said Kevin Turner, Microsoft chief operating officer, in a statement.

The results were, overall, a major improvement from the prior year, results from which were sullied by the global recession. Then, the company reported $12.92 billion in revenue for the first fiscal 2010 quarter, which was itself a 14 percent decline from the same period the year before. Net income was $3.57 billion, a decline of 18 percent. For that quarter, the company also deferred $1.47 billion of revenue, representing early OEM sales of Windows 7.

This quarter's robust performance stands in contrast with the increased wariness that the investment industry has shown for Microsoft, which has been criticized for not keeping abreast in technologies beyond its stronghold in personal computers, such as in smartphones and tablets.

At the Microsoft Professional Developers Conference this week in Seattle, Microsoft CEO Steve Ballmer expressed enthusiasm for moving into new market areas such as smartphones.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com

To comment on this article and other PCWorld content, visit our Facebook page or our Twitter feed.
Shop Tech Products at Amazon