October 19, 2012

Microsoft posts quarterly earnings of $16.01 billion, net income drops by 22 percent ahead of Windows 8 launch

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Ahead of taking on a fundamental shift in business strategy, Microsoft today announced revenue of $16.01 billion for fiscal Q1 2013. That fell just below Wall Street expectations that had called for $16.5 billion in sales. Net income plummeted by 22 percent as the company readies major hardware and software initiatives due in the weeks ahead.
As expected, Windows lagged significantly in the months preceding Microsoft's much-publicized debut of Windows 8. The Windows and Windows Live divisions fell to $3.24 billion, a decrease of 33% compared to where things stood one year ago. That's largely attributable to waning PC momentum: recent estimates from Gartner indicate that worldwide PC shipments fell 8 percent in the third quarter as consumers await the next version of Windows, due on October 26th. The company's reliable business division (which includes Office) grew by 1 percent to $5.50 billion in Q1.
Led by Xbox 360, which remains the top-selling console in the US, the Entertainment and Devices Division dropped a meager one percent and tallied $1.95 billion in revenue. Still, the imminent arrival of Microsoft's Surface tablet will likely make those figures — which have traditionally held steady — far less predictable in Q2. The Wall Street Journal predicts Redmond is prepping between 3 to 5 million of the Windows RT devices and the success (or failure) of that effort will undoubtedly be felt during its next financial update.

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