Close
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home IT Management
    • IT Management

    Microsoft Profits Drop 22% Ahead of Windows 8 Launch

    By
    Darryl K. Taft
    -
    October 19, 2012
    Share
    Facebook
    Twitter
    Linkedin

      Microsoft reported a 22 percent decline in profit and a dip of 8 percent in revenues for its first fiscal quarter of 2013, as the company prepares for the launch of Windows 8 on Oct. 26.

      The software giant said the decline came as customers put off purchases to wait for Windows 8, which is expected to deliver a boost to Microsoft, its partners and developers.

      “The PC market was challenged this quarter,” said Peter Klein, Microsoft’s chief financial officer, during an Oct. 18 call with analysts and investors to discuss the earnings for the quarter that ended Sept. 30, 2012. “OEMs drew down their Windows 7 inventories,” he added.

      “While enterprise revenue continued to grow and we managed our expenses, the slowdown in PC demand ahead of the Windows 8 launch resulted in a decline in operating income,” Klein said in a statement

      Klein also noted that Microsoft has certified about 1,000 unique Windows 8 systems and there will be more to come. He also pointed out that over the last year Microsoft kicked off the largest technology refresh in the company’s history as it is delivering new versions of its core operating system, Office suite, server OS, Windows Phone software, Internet Explorer Web browser, and core development tools, among other things.

      Microsoft announced quarterly revenue of $16.01 billion and net income of $4.47 billion. Those figures compare with the $17.37 billion in revenues and $5.74 billion in net income the company reported for the same period last year.

      However, Microsoft said its financial results for the quarter reflect the deferral of $1.36 billion of revenue, due to “the Windows Upgrade Offer, presales of Windows 8 to OEMs prior to general availability, and the Office Offer,” according to press release on the earnings.

      “The launch of Windows 8 is the beginning of a new era at Microsoft,” said Steve Ballmer, Microsoft CEO, in a statement. “Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers and partners.”

      Microsoft’s Server & Tools business reported $4.55 billion in first-quarter revenue, an 8 percent increase from the prior year period, driven by double-digit revenue growth in SQL Server and more than 20 percent growth in System Center revenue. In September, Microsoft continued to enrich its server offerings with the launch of Windows Server 2012.

      Klein said Microsoft has done particularly well in the enterprise with its server and tools products. “Our products are scalable and flexible and provide the lowest cost of ownership,” he said.

      The Microsoft Business Division posted $5.50 billion in first-quarter revenue, a 2 percent decrease from the prior year period. Microsoft’s productivity server offerings –including Lync, SharePoint, and Exchange – continued double-digit revenue growth, Klein said.

      “Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and Microsoft Business Division products as businesses commit to our technology roadmap,” Klein said.

      Meanwhile, the Windows & Windows Live Division posted revenue of $3.24 billion, a 33 percent decrease from the prior year period.

      “We’re incredibly excited to be approaching general availability of Windows 8 and Windows RT,” said Kevin Turner, Microsoft chief operating officer, in a statement. “We’ve already certified more than 1,000 systems for Windows 8 from our hardware partners, ranging from the smallest tablets and convertibles to touch-enabled ultrabooks and all-in-ones to the most powerful desktop computers.”

      Microsoft’s Online Services Division reported revenue of $697 million, a 9 percent increase from the prior year period. Online advertising revenue grew 15 percent driven primarily by an increase in revenue per search.

      And the company’s Entertainment and Devices Division posted revenue of $1.95 billion, a decrease of 1 percent from the prior year period. Xbox continues to be the top-selling console in the U.S., where it now has 49 percent market share. Windows Phone 8 will launch this fall with an expanded array of products, prices, carriers, and markets. Skype continued its rapid growth and now has over 280 million users.

      There were 120 billion minutes of calls on Skype in the quarter, which was an increase of 58 percent, Klein said.

      Darryl K. Taft
      Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.

      MOST POPULAR ARTICLES

      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Applications

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Applications

      Kyndryl’s Nicolas Sekkaki on Handling AI and...

      James Maguire - November 9, 2022 0
      I spoke with Nicolas Sekkaki, Group Practice Leader for Applications, Data and AI at Kyndryl, about how companies can boost both their AI and...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×