Microsoft's Record Revenue is Just Shy of Meeting Expectations
Microsoft (NASDAQ: MSFT) reported record earnings for the second quarter, accumulating $21.5 billion in revenue. This is only $30 million less than the $21.53 billion revenue that Wall Street anticipated.
The company's FY13 Q2 EPS came in at $0.76, meeting expectations.
"Our big, bold ambition to re-imagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers," Steve Ballmer, CEO of Microsoft, said in a company release.
"With new Windows devices, including Surface Pro, and the new Office on the horizon, we'll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need."
Most notably, Microsoft raised its Windows Division revenue by 24 percent (compared to the prior year period), earning $5.88 billion. This corresponds with the record-breaking success of Windows 8, which defied critical assessments and soothed investor worries after its release. Microsoft has sold more than 60 million licenses for the new operating system since its October 2012 release.
"We saw strong growth in our enterprise business driven by multi-year commitments to the Microsoft platform, which positions us well for long-term growth,” said Peter Klein, CFO of Microsoft, who was also quoted in a company release. "Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and the Microsoft Business Division."
In fact, the Server & Tools business reported $5.19 billion of revenue -- a nine percent increase from the prior year period. Microsoft said that this was driven by "double-digit percentage revenue growth in SQL Server and System Center."
The Online Services Division rose 11 percent with revenue of $869 million. Microsoft said that its online advertising revenue grew 15 percent, an increase that was "driven by an increase in revenue per search."
Not all was perfect in the Land of Windows, however. Microsoft's Business Division decreased by 10 percent with revenue of $5.69 billion.
The company's Entertainment and Devices Division declined by 11 percent as consumers wait for the next generation of game consoles -- specifically the next Xbox -- to arrive. Even with the decline, this division still posted revenue of $3.77 billion.
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