Uncertain economic times has led to lower revenue and downsizing in many prominent tech companies. But with Yahoo and Xerox both cutting thousands of jobs, we see staples of the industry posting record sales and revenues. Microsoft was the latest tech giant to report its quarterly earnings, and the numbers were certainly not a barometer for the rest of the industry.
Microsoft’s first fiscal quarter, which ended on September 30, resulted in strong numbers across the board. The Redmond, WA-based software powerhouse announced revenue of $15.06 billion for the period, a 9 percent increase over the Q1 of last year. Operating income, net income and diluted earnings per share for the quarter were $6.00 billion, $4.37 billion and $0.48, respectively.
"Our customers are asking how they can save money and do more with less," said Kevin Turner, chief operating officer at Microsoft. "Microsoft is uniquely positioned to help our customers save money through supplier consolidation, increased productivity, and a low total cost of ownership through the depth and breadth of our product portfolio and solutions."
While no one expected Microsoft to have dismal numbers, their solid numbers throughout the year are resilient despite what many consider to be a failed flagship product in its Vista operating system. That, coupled with the dire economic landscape, would spell doom for many companies. But, with Microsoft, diversity and a wide range of products is often its saving grace. "In a challenging economic environment, the first-quarter results exhibit the strength and diversity of our business model," said Chris Liddell, Microsoft’s CFO.
One sector that was an undoubted boost to Microsoft’s overall numbers was Xbox 360 sales. In the quarters three month period, Microsoft pushed 2.2 million units, driven by increased sales in Japan, which were boosted by the solid line of RPGs coming to the platform, including titles like Final Fantasy XIII. Microsoft has now sold 22 million 360s during the consoles lifetime, only two million shy of the original Xbox total sales numbers. The increased presence in Japan was one factor, while introductions of new bundles across the globe, which included consoles bundled with two or even three titles and new, bigger hard drives made the 360 a hot ticket from July into September.
Microsoft’s Entertainment and Devices Division, which is responsible for the 360 as well as other products like the Zune, increased its operating income from $167 million of Q1 last year to $178 million, and saw a revenue increase of 9 percent. With the holiday season approaching, Microsoft seems confident that its second quarter will be as successful as the first. with revenue expected to range from $17.3 billion to $17.8 billion, and operating income to be between $6.1 billion to $6.4 billion for Q2.