Microsoft barely beats Street, raises outlook thanks to Skype

Microsoft barely beats Street, raises outlook thanks to Skype

Summary: Wall Street predictions continue to be on point this week as Microsoft matches on share earnings.

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Next quarter earnings results could look very different for Microsoft following the recent acquisition of Skype. But for now, the Redmond, Wash.-based corporation turned out decent results.

Microsoft reported a net income of $5.74 billion, or 68 cents a share (statement) for the first fiscal quarter. Non-GAAP earnings were 68 cents a share on a revenue of $17.37 billion, up 7 percent from the same period of the prior year.

Wall Street was expecting of 68 cents a share on revenue of $17.23 billion.

See also: BNET: Microsoft Earnings Meet Expectations, But Glory Days Are Gone

In prepared remarks, Microsoft's chief operating officer Kevin Turner attributed this quarter's success to a spread of various products:

We had another strong quarter for Office, SharePoint, Exchange, and Lync, and saw growing demand for our public and private cloud services including Office 365, Dynamics CRM Online, and Windows Azure. With a great set of consumer products like Windows 7 PCs, Windows Phone 7.5, Xbox and Kinect, we are excited about the holiday buying season.

For the outlook, Microsoft is predicting a revenue of $28.6 billion to $29.2 billion at the end of second fiscal quarter, which is when Microsoft plans to start including the results stemming from the Skype purchase.

Wall Street is expecting 83 cents a share on revenue of $21.17 billion.

Key points:

  • Windows 8 was given a grand unveiling at the BUILD developer conference in September.
  • Windows Phone 7.5 released with many new features.
  • Xbox was the best-selling gaming console in the United States for the ninth consecutive month.
  • Bing is seeing greater integration across other Microsoft products, especially Xbox and Windows Phone.

By the numbers:

  • Windows and Windows Live Division revenue was $4.87 billion, up two percent over the prior period, which Microsoft asserts is "in line with the PC market."
  • Over 450 million licenses for Windows 7 sold since launch.
  • Operating income was $7.20 billion, up 1 percent from the same time last year.
  • The Microsoft Business Division reported $5.62 billion in first quarter revenue.
  • Bing's organic U.S. market share grew 350 basis points year-over-year to 14.7 percent, while Bing-powered U.S. market share -- including Yahoo properties -- accounted for approximately 27 percent.

Related:

Topics: Microsoft, Banking, E-Commerce

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21 comments
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  • RE: Microsoft barely beats Street, raises outlook thanks to Skype

    Guess you'll have to put off the death of Microsoft for yet another quarter. Oh well :(
    rwalrond
    • RE: Microsoft barely beats Street, raises outlook thanks to Skype

      @rwalrond

      LIES! All of it! This is the year of Linux! ;)
      The one and only, Cylon Centurion
      • I hear Windows 8 will suck

        @Cylon Centurion
        So there is always next year. And if Windows 8 doesn't suck, I'm sure we'll hear that Windows 9 will suck. And if Windows 9 doesn't suck, I'm sure we'll hear that Windows 10 will suck.

        Rinse.

        Repeat.
        toddybottom
      • RE: Microsoft barely beats Street, raises outlook thanks to Skype

        @Cylon Centurion <br>Don't forget that with the release of Microsoft Windows (insert version here) is the opportunity for linux to take over!
        LoverockDavidson_-24231404894599612871915491754222
    • RE: Microsoft barely beats Street, raises outlook thanks to Skype

      @rwalrond they been dead for quite a while, they are just zombies sucking blood off the young.
      tatiGmail
      • Why bring Google into this?

        @tatiGmail
        William Farrell
      • RE: Microsoft barely beats Street, raises outlook thanks to Skype

        @tatiGmail - actually you are dead (as in brain) - and just sucking up air from the rest of us.
        mrmin
      • RE: Microsoft barely beats Street, raises outlook thanks to Skype

        @tatiGmail Well then most companies should look into hiring zombies, clearly they're doing a good job racking in that money.
        rwalrond
      • RE: Microsoft barely beats Street, raises outlook thanks to Skype

        @William Farrell

        +1

        You actually made me LOL this morning.
        Badgered
    • RE: Microsoft barely beats Street, raises outlook thanks to Skype

      @rwalrond

      Looks like they might have bought a lemon in Skype unless they fix it's serious security vulnerabilities.

      http://www.networkworld.com/community/node/78986
      Alan Smithie
  • RE: Microsoft barely beats Street, raises outlook thanks to Skype

    At least they matched the estimates.
    LoverockDavidson_-24231404894599612871915491754222
    • Demise of MSFT greatly exaggerated.

      @LoverockDavidson_ When was the last time MSFT had a quarter that beat estimates and APPL didnt'? Things are changing my friend.
      MSFTWorshipper
      • RE: Microsoft barely beats Street, raises outlook thanks to Skype

        @MSFTWorshipper <br>Well for that matter, Apple disappointed Wall Street with their recent iPad2 sales that doesn't mean Apple is doomed and at the same time neither Microsoft.
        Ram U
    • RE: Microsoft barely beats Street, raises outlook thanks to Skype

      @LoverockDavidson_


      Share price has gone nowhere in the last 10 years and it's going nowhere, invest your money elsewhere if you want growth.
      Alan Smithie
  • RE: Microsoft barely beats Street, raises outlook thanks to Skype

    The scale that these tech companies are operating at is just mind blowing. If my math is right, Microsoft beat the street by $140 million this quarter.

    The amount of money they are over expectations in <b>one quarter</b> would be enough to run the last place I worked for almost 100 years with no revenue.

    For Microsoft it amounts to a rounding error.
    Rich Miles
  • RE: Microsoft barely beats Street, raises outlook thanks to Skype

    LOL! I love how he calls it decent results, when it's the best quarter one ever for Microsoft. Way to put a negative spin on great quarterly results.
    jhammackHTH
  • RE: Microsoft barely beats Street, raises outlook thanks to Skype

    LOL! I like how he calls Microsoft's best first quarter ever merely decent. Way to put a negative spin on fantastic quarterly results.
    jhammackHTH
  • What's really surreal...

    This was a record breaking quarter for Microsoft - and their revenues were up 6% in a sluggish market in the middle of a market shift...

    And most pundits (including the ones here at ZDNet) have been declaring Microsoft technically doomed - a shuffling zombie of a company too stupid to realise they're dead...

    And even when shown to be wrong... the reaction is to colour the article "Microsoft BARELY beats street...".

    I'm sure if this had been Apple, the title would have been 'Apple surprises street by beating their expectations...'
    TheWerewolf
  • RE: Microsoft barely beats Street, raises outlook thanks to Skype

    Still stagnant after all of these years .... should have put my money in the mattress.
    BrentRBrian
    • RE: Microsoft barely beats Street, raises outlook thanks to Skype

      @BrentRBrian
      How are the dividends in that mattress fund?
      kstap