Microsoft fiscal Q2 revenue miss estimates thanks to Windows

The Windows and Windows Live Division was the only unit that declined from the previous quarter, posting a revenue of $4.74 billion, down 6 percent.

As the world waits for Windows 8, Microsoft is slightly suffering as it fell just below one of Wall Street's predictions for the second fiscal quarter -- although it did post higher earnings than expected and shares climbed in after-hours trading.

Microsoft reported a second fiscal quarter net income of $6.62 billion, or 78 cents a share (statement). Non-GAAP earnings were 79 cents a share on a revenue of $20.89 billion -- a 5 percent increase from the prior year.

Yet, Microsoft missed on the revenue mark. Wall Street was expecting Microsoft to report earnings of 76 cents a share on revenue of $20.93 billion.

See also: Microsoft's second quarter: Hurry up and wait for Windows 8

In prepared remarks, CEO Steve Ballmer focused on what's to come from Microsoft this year, asserting that will "accelerate many of our key products and services."

Coming out of the Consumer Electronics Show, we’re seeing very positive reviews for our new phones and PCs, and a strong response to our new Metro style design that will unify consumer experiences across our phones, PCs, tablets, and television in 2012.

The Windows and Windows Live Division was the only unit that declined from the previous quarter, posting a revenue of $4.74 billion, down 6 percent.

Yet the Entertainment division did considerably better with an increase of 15 percent with a revenue of $4.24 billion. The Xbox 360 installed base now totals approximately 66 million consoles and 18 million Kinect sensors.

Microsoft is expected to report earnings of 60 cents a share on revenue of $17.5 billion for its fiscal third quarter.

Microsoft downgraded its operating expense guidance downward to between $28.5 billion and $28.9 billion for the full year ending June 30, 2012.

By the numbers:

  • Microsoft has sold over 525 million Windows 7 licenses since launch. Microsoft has sold over 525 million Windows 7 licenses since launch.
  • Xbox LIVE now has 40 million members worldwide, a 33 percent increase from the prior year period.
  • The Microsoft Business Division reported $6.28 billion in second quarter revenue, a 3 percent increase from the prior year period
  • Nearly 200 million licenses of Office 2010 have been sold in the 18 months since launching.
  • Bing's organic U.S. market share grew to 15.1 percent, while the Bing-powered U.S. market share, including Yahoo properties, was approximately 27 percent.

Correction: The headline was amended to read "revenue" instead of "earnings."

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