Microsoft barely beats Street, raises outlook thanks to Skype

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.

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.