Microsoft Reports Record Third-Quarter Revenue

Microsoft Corp. today announced third-quarter revenue, operating income and diluted earnings per share of $14.45 billion, $4.41 billion and $0.47, respectively. Operating income and earnings per share results included a charge of $1.42 billion, or $0.15 per share, for the European Commission fine. Income taxes were reduced by $0.15 per share for the resolution of a tax audit.

"Our third-quarter results demonstrate the benefit of our diversified business model," said Chris Liddell, chief financial officer of Microsoft. "Our broad span across geographies, product categories and customer segments is a tremendous asset and supports our outlook for double-digit revenue, operating income and earnings per share growth for this fiscal year and also for fiscal year 2009."

Entertainment and Devices revenue for the quarter grew 68% over the comparable period last year driven by robust demand for Xbox 360 consoles. Cumulative console sales surpassed 19 million during the quarter, up 74% from a year ago. Server and Tools revenue growth of 18% added to its string of consecutive double-digit revenue growth quarters, which now stands at 23.

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14 Comments

(EduardValencia said @ #1)
19 million xbox 360 consoles sold

...and 18.9 million Xbox 360 consoles listed on Craigslist during the quarter.

...Source?

Oh no wait! That's supposed to be a joke...

*Applause light comes on*...

*silence*

*tumble weed blows through Neowin*

Hhhmmm.....

(C_Guy said @ #1.3)
...Source?

Oh no wait! That's supposed to be a joke...

*Applause light comes on*...

*silence*

*tumble weed blows through Neowin*

Hhhmmm.....

I actually laughed pretty hard at this

I love how the market plays this... I read this morning "Microsoft has disappointing quarter" come here its record revenues MS thrilled! basically...

(neufuse said @ #2)
I love how the market plays this... I read this morning "Microsoft has disappointing quarter" come here its record revenues MS thrilled! basically...

Basically they act like the iraqi information minister because if they don't act happy, investors will get worried and want to sell their shares or tell MS to make changes, etc. If you're a company and you want people to invest in you and people to buy your products, you're going to tell them you're the best and you are on top of everything and know what you're doing, and that everything is going great. That inspires confidence in those who will open their wallets to you. You don't want to make them scared to do that! So deny bad reports and rumors, spin news into PR, astroturf where possible, and constantly praise yourself.

Are they or aren't they making money? I keep seeing reports on both sides, I guess it depends on which way they want to spin it.

As for the 360, they may be making money, but not as much as they could be, and the 360's advantage seems to be declining in the recent months when we're seeing a higher adoption rate of the competition and less in the 360's future (no blu-ray, they already launched their huge properties and there are big 1st and 3rd party games now in the limelight and coming in the future for the other consoles).

they have plenty of 1st/3rd party games coming up. gta4, ninja gaiden 2, fable 2, gears of war 2, too human, banjo kazooie, maybe pd2. yes alot of these are sequels, but that speaks to the strength of the 360 and those games to me and not a lack of originality.

The ps3 and the wii are definately having some great sales but the 360 still has a higher software attach rate. For the most part if a software company wants to almost guarantee a million seller they come to 360 and that doesn't show any signs of letting up anytime soon. I think MS would be wise to ride this wave of profit until Christmas then cut the price. They don't need to cut the price now, but the ps3 would definately look alot stronger with it's blu-ray and more games by then compared to non-price cut 360 IMO.

The Wii attach rate is now 6, and ~7.5 in North America, and the PS3's is above 5 overall. Yeah the 360 has had a higher attach rate but the newer consoles are only now launching their big properties and the 360 has had a bigger head start. There are simply a lot more games available for the 360 to choose from, and developers have had a bigger head start (not to mention that the XBox development was cut off when the 360 launched and development of those games moved to the 360). But while the 360 has those titles you mentioned in the pipeline, the PS3 is getting ready to launch some of their first exclusive system-sellers and now a lot more developers are starting to show their games.

As for the Wii, the momentum is building for developer support and developers are putting a lot more thought into how they use the controls and hardware. There has been a lot of crap from third parties but the Wii is starting to get a lot more quality now that developers realize how much money they're missing out on. I'm not sure if they count Live Arcade games but who knows if scaling them back has meant they are selling less games, or if they scaled it back simply so gamers would look at the options they have on store shelves. Perhaps also the Wii would benefit from game demos, and it seems like Nintendo is starting to offer that type of functionality now.

You're right the 360 doesn't need to drop its price, but I'm sure that MS will stop at nothing to make sure they seal the deal. They can't lose momentum or it will effect them badly in the long run. It seems like they are trying to keep up the good news as much as they can so gamers don't stop to look around at their options.

If you feel like Microsoft tricked you into buying something then perhaps you should sue them. That's what everyone else does who can't take responsibility for their purchasing decisions.

Do a few seconds of research and then come tell us what product Microsoft has a monopoly in. Right, none.

It's ok if you feel the need to hate Microsoft but at least get your facts straight before forming an opinion. The numbers are not a surprise because Microsoft is successful, not because they pointed a gun to your head and forced you to do anything.

(C_Guy said @ #4.1)
Do a few seconds of research and then come tell us what product Microsoft has a monopoly in. Right, none. It's ok if you feel the need to hate Microsoft but at least get your facts straight before forming an opinion.

Your Microsoft Fanboy comments (as so very often) are inaccurate and tiresome. Microsoft are a convicted Monopolist. They have been prosecuted by the US government and also the EU.

Obviously you think that any company can bully it's way to the top of the market, and then use large profits, to crush all potential competition. You accused a previous poster of sleeping through economics class. You must have been on illicit substances during yours. BTW I'm a MSFT stock holder. I hope a fanboy like you, is buying stock, to make mine go up in value.

Interesting comment about tricking people into purchasing products. I wonder how many people would have purchased XBox 360's if they had known that the likelihood was that the product would fail in under a year, and be out of guarantee after 3 months :nuts: It took considerable pressure to force Microsoft to replace faulty consoles, too late for many who had attempted a repair or disposed of the (early) pile of junk.

(C_Guy said @ #4.1)
If you feel like Microsoft tricked you into buying something then perhaps you should sue them.

You're absolutely right. MS should be sued for attempting to force businesses to buy Vista by withholding XP from the market.If businesses, and individuals do not want to switch, they should have their XP licenses extended.

At least Dell, HP, and Lenovo will offer XP downgrades past June 30th, despite MS's extortion attempts, but MS will still count those as Vista sales. I guess next year people will then wonder where all these phantom Vista users are when Vista-centric software doesn't sell as expected.

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