Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

Summary: Microsoft's fiscal fourth quarter results highlighted gains from a corporate IT upgrade cycle as earnings and revenue handily topped Wall Street expectations.

SHARE:

Updated: Microsoft's fiscal fourth quarter results highlighted gains from a corporate IT upgrade cycle as earnings and revenue handily topped Wall Street expectations.

The company reported net income of $4.52 billion, or 51 cents a share, on revenue of $16.04 billion. Wall Street was expecting earnings of 46 cents a share on revenue of $15.27 billion. Some market watchers were also comparing Microsoft's revenue to Apple's as a symbolic comparison, but the software giant topped Apple's $15.7 billion in quarterly revenue.

Not-so-surprisingly, Windows 7 carried team Microsoft with a big assist from Office 2010. Microsoft's servers and tools business also performed well due to the corporate upgrade cycle.

In a statement, Microsoft's Kevin Turner, chief operating officer, talked up Windows Azure and the company's online productivity tools. For the fiscal year ending June 30, Microsoft reported net income of $18.76 billion on revenue of $62.48 billion.

Microsoft gave operating expense guidance for fiscal 2011, but little else. Microsoft is projecting expenses of $26.9 billion to $27.3 billion for fiscal 2011.

Key points from Microsoft's conference call:

  • Microsoft CFO Peter Klein said Microsoft has sold 175 million Windows 7 licenses.
  • "We are encouraged by the resurgence in business PC shipments, and expect the business PC refresh cycle to continue through fiscal year 2011. The recent refresh of our Enterprise Products has positioned us well to meet customers' needs as they return to investing in information technology," said Klein.
  • Microsoft has no answer for tablets. Klein was asked about tablets and said:

We think tablets are very interesting and remind us that there are always new scenarios and new opportunities. And we are constantly working with our partners and our OEM partners. In fact, I think one of the things that has driven the PC market and Windows growth this year has been the work we have done with our OEM partners on multiple scenarios and form factors and price points to hit all those.

If you look at the segment results, there are a few key takeaways:

  • Server, Windows 7 and Office are strong;
  • The online business unit continues to lose a lot of money;
  • Entertainment and devices lost money.

And the key slides:

Topics: Banking, Enterprise Software, Microsoft, Operating Systems, Software, Windows

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

14 comments
Log in or register to join the discussion
  • Same story - windows & office

    The positive: they avoided ridicule just staying ahead of Apple's revenue.
    Richard Flude
    • RE: Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

      @Richard Flude 11 products still driving over $1B ea in revenue. Yeah 'ridule'. #opinionfail
      mcleutz
    • Interesting. Very similar to Apple's

      iPod and iPhone. I guess each company can continue to survive on just two products each.
      :|
      Tim Cook
      • Ah the comprehension of a softie

        actually ipod down, Macs and everything else through the roof! But almost right;-)
        Richard Flude
  • Just bought more shares of MSFT...

    I bought some more shares of "Mr. Softee" after hours. My broker was thrilled. My wife complained that our entire portfolio has shown 0% growth over the past decade because I am 100% in MSFT. I told her to just wait, MSFT will hit $160 and then split again and we will be billionaires. She did not seem to believe me.
    Mike Cox
    • RE: Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

      @Mike Cox

      Cast aside the unbelievers, even your wife if necessary!
      rtk
  • PC's are dead

    Wow, the prediction that PC's are dead is coming true. 'Only' 170 million copies of Windows 7 sold. The end of an era.
    mstrsfty
    • PC's are far from dead

      @mstrsfty <br><br>They have survived the asteroids that are Linux and Mac and continue to evolve.
      The one and only, Cylon Centurion
      • RE: Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

        @NStalnecker Now if only Windows 8 will come with virtual desktops built in rather then a 3rd party bolt-on.
        MSFTWorshipper
    • RE: Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

      @mstrsfty

      I love the way Steve Jobs changed 4 industries, but calling for Death of the PC was plain ridiculous and stupid! 7 copies per second.. Microsoft FTW :D
      Rahul Mulchandani
      • RE: Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

        @Rahul Mulchandani Only because of an illegally obtained monopoly. It was Bill Gate's daddy who arranged the license deal with IBM in 1983 that made MSFT what it is. That and loads of FUD and "embrace, extend and extinguish".
        MSFTWorshipper
      • You need a new excuse.

        @MSFTWorshipper

        27 years, one antitrust action, and one determined Apple advertising campaign later, Microsoft's current OS release stands to be its most successful ever.
        Lester Young
  • RE: Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

    For all the inept prognosticator and chicken littles who take pleasure in a pipe dream of Microsoft's demise, you need new spells. We already knew your knowledge were lacking, but when the magic and mystic goes bad, that is the death of witchcraft and warlords. Oh, and, by the way--if you can see--you might realise why the the most profitable company in the world continue to believe in Mr Balmer. It feels sooo good to see crows eat crow.
    eargasm
    • RE: Windows 7, corporate upgrade cycle propel Microsoft's fourth quarter

      That's how monopolies survive.

      They continue to be be monopolies.

      With nothing else really available, it's easy to claim success, now isn't it...
      ahh so