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Microsoft net profit up thanks to strong demand for Windows 7

April 23, 2010

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After markets closed yesterday, Microsoft announced record third-quarter revenue of $14.50 billion for the quarter ended March 31, 2010.

This represents a 6 percent bump from the same period last year. Operating income, net income and diluted earnings per share for the quarter were $5.17 billion, $4.01 billion and $0.45 per share, which represents an increase of 17 percent, 35 percent and 36 percent, respectively, when compared with the prior year period.

Microsoft's latest results include the deferral of $305 million of revenue relating to the Microsoft Office 2010 Technology Guarantee program.

Adjusting for the revenue deferral, third-quarter revenue totaled $14.81 billion, an increase of 8 percent over the corresponfing 2009 period.

“Windows 7 continues to be a growth engine, but we also saw strong growth in other areas like Bing search, Xbox Live and our emerging cloud services,” said Peter Klein, chief financial officer at Microsoft.

“Our record third-quarter revenue along with continued rigor on cost management resulted in exceptional EPS growth,” he added.

Windows revenue was up 28 percent, compared with the same quarter a year earlier, driven by strong demand for Windows 7. More than 10 percent of all PCs worldwide are running Windows 7 today, making Windows 7 by far the fastest-selling operating system in history.

“Business customers are beginning to refresh their desktops and the momentum of Windows 7 continues to be strong,” said Kevin Turner, chief operating officer.

“We are also seeing tremendous interest in our market-leading cloud services for business,” Turner added.

Microsoft offers operating expense guidance of $26.1 billion to $26.3 billion for the full year ending June 30, 2010.

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Source: Microsoft.