Microsoft Revenue Surges on Strong Sales of Vista, Office

By Peter Galli  |  Posted 2007-10-25 Print this article Print

Revenue growth in the first quarter was the fastest since 1999.

Microsoft reported a 27 percent surge in revenue to $13.76 billion for the first quarter of 2007, which ended September 30, 2007, making it the fastest growth in revenue for any first quarter in seven years, and up almost $3 billion from the same quarter a year ago. The software maker, headquartered in Redmond, Wash., said the results were buoyed by combined revenue growth of more than 20 percent across its client, business, and server and tools businesses.
This reflected "robust demand for Windows Vista, the 2007 Microsoft Office system, Windows Server, and SQL Server," Chris Liddell, Microsofts chief financial officer, said in a statement released Oct. 25 after the close of the financial markets in New York.
Operating income for the quarter came in at $5.92 billion compared with $4.47 billion a year ago, with net income of $4.29 billion (as opposed to $3.48 billion last year) and diluted earnings of $0.45 a share for the quarter, from $0.35 a year earlier. Microsofts revenue for the fiscal year to end June 2007 topped the $50 billion mark. Click here to read more. "This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999. Operating income growth of over 30 percent also reflects our ability to translate revenue into profits while making strategic investments for the future," Liddell said. "Customer demand for Windows Vista this quarter continued to build, with double-digit growth in multi-year agreements by businesses and with the vast majority of consumers purchasing premium editions," Kevin Johnson, the president of Microsofts platform and services division, said. With regards to the business outlook, Microsoft management said it expected revenue for the quarter ending December 31, 2007 to be in the range of $15.6 billion to $16.1 billion, with operating income of between $5.9 billion and $6.1 billion, and diluted earnings in the range of $0.44 to $0.46 a share. Read more here about why Microsoft is hungry for acquisitions. For the full fiscal year, management expected revenue of $58.8 billion to $59.7 billion, operating income of between $23.3 billion and $23.7 billion and diluted earnings in the range of $1.78 to $1.81 a share. "This full fiscal year guidance includes approximately $85 million of estimated integration costs and in-process research and development expenses, or a $0.01 impact to diluted earnings per share, due to the acquisition of aQuantive," Liddell said. Check out eWEEK.coms for Microsoft and Windows news, views and analysis.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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