Microsoft posts record quarter but says tablets have “cannibalized” netbooks

21.10.2011
Despite weak consumer demand for PCs, posted record first quarter revenue of $17.37 billion for the period that ended Sept. 30. This beat analysts' reported expectations of $17.2 billion. Revenue increased 7% percent over the year-ago period. Microsoft credited the increase to enterprise demand for Office, server and development tools.

The Microsoft Business Division reported $5.62 billion in revenue, an 8% increase from the prior year period when Microsoft launched Office 2010. Revenue from server products like Lync, SharePoint, and Exchange grew double-digits, and the Dynamics business grew 17% in the quarter. Lync revenue grew by over 25%. Plus, Office 365 has already signed as many customers as its predecessor did, Business Productivity Online Standard Suite (BPOS), said Peter Klein, chief financial officer, during the company's earning webcast.

The Server & Tools unit posted $4.25 billion in revenue, a 10% increase over the prior year period. This unit is responsible for Windows Server, Microsoft SQL Server, Windows Azure, Visual Studio, System Center, embedded platforms and enterprise services. Microsoft says the unit saw its sixth consecutive quarter of double-digit revenue growth that was driven by demand for SQL Server, Windows Server, System Center and Enterprise CAL Suites – the client licenses Microsoft requires for its server products.

Profits increased as well. Microsoft reported that operating income, net income and diluted earnings per share for the quarter were $7.20 billion, $5.74 billion, and $0.68 per share. This represents increases of 1%, 6%, and 10%, respectively, when compared with the prior year period.