Good but not great
Software giant Microsoft announced record results for the first quarter of the calendar year yesterday, with revenues of $16.43 billion and profit of $5.23 billion both ahead of analyst expectations. This still wasn't enough to appease investors, however, with Microsoft shares down a percent or two in afterhours trading.
Perhaps one of the reasons was that Microsoft relinquished its last remaining claim to be the world's largest technology company with its profit tally. Traditional rival Apple, which overtook Microsoft in terms of Market cap and revenue some time ago, was more profitable for the first time last quarter - sticking nearly six billion more in the bank.
"We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses," said Peter Klein, CFO at Microsoft. "Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications."
Klein wasn't joking about the mix PC environment. We've reproduced the slides from Microsoft's earnings announcement that concern each of its key business divisions below. The first slide concerns Windows and, while business spend was up, that was offset by declining consumer spend. The remarkable figure was a decline of 40 percent in netbooks.
Elsewhere, Microsoft says businesses are adopting Office 2010 five times faster than they did Office 2007, the server division seems strong, and Kinect continues to be a rare consumer electronics success for Microsoft. Conversely growth in online services remains slow, and the best Microsoft had to report about Windows Phone 7 was the Nokia deal, implying sales are hardly setting the world on fire.
