For the quarter ended March 31, 2012, Microsoft reported quarterly revenue of $17.41 billion, marking a six percent increase from the prior year period which was $16.43 billion. Operating income was just as positive at $6.37 billion, up 12 percent from the prior year period. This caught many analysts off guard as, on average, they expected the company to report earnings of 58 cents a share and revenue of $17.18 billion, according to a New York Times article.
Further, net income and diluted earnings per share for the quarter were $5.11 billion and $0.60 per share, compared with $5.23 billion and $0.61 per share, respectively, in the prior year period. Prior year net income and diluted earnings per share included a $461 million or $0.05 per share tax benefit, which was largely related to a tax settlement with the U.S. Internal Revenue Service, according to company officials.
What was of great note this quarter, however, was the fact that Microsoft sales of its flagship software product, Windows, rose four percent in the fiscal third quarter, despite analyst predictions that there would be a drop in business because of widespread industry data revealing weakness in the personal computer business. Specifically, the Windows and Windows Live Division posted revenue of $4.62 billion, a four percent increase from the prior year period. Moreover, a commitment to Windows 7 was demonstrated with enterprise desktops on Windows 7 now up to 40 percent worldwide.
“We saw strong demand for our business desktop and infrastructure offerings,” said Peter Klein (News - Alert), chief financial officer at Microsoft. “Solid revenue growth and continued cost discipline drove double-digit operating income growth.”
This success with its core franchises is particularly exciting because Microsoft has currently found itself treading in deep water with a big shark like Apple (News
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