Microsoft have just released its fiscal Q3 2013 statement and it’s a little bit of a mixed bag.
“The bold bets we made on cloud services are paying off as people increasingly choose Microsoft services including Office 365, Windows Azure, Xbox LIVE, and Skype,” said Steve Ballmer, chief executive officer at Microsoft. “While there is still work to do, we are optimistic that the bets we’ve made on Windows devices position us well for the long-term.”
The Microsoft Business Division posted $6.32 billion of revenue, an 8% increase from the prior year period. Adjusting for the net recognition of revenue related to the Office Upgrade Offer and Pre-Sales, Microsoft Business Division non-GAAP revenue increased Notably during that quarter, Microsoft launched the new versions of Office in the cloud.
The Server & Tools business reported $5.04 billion of revenue, an 11% increase from the prior year period, driven by double-digit percentage revenue growth in SQL Server and System Center.
Here’s where things got tricky.
The Windows Division posted revenue of $5.70 billion, a 23% increase from the prior year period. Adjusting for the recognition of revenue related to the Windows Upgrade Offer, Windows Division non-GAAP revenue was flat.
The Online Services Division reported revenue of $832 million, an 18% increase from the prior year period. Apparently Online advertising revenue grew 22% driven by an increase in revenue per search.
The Entertainment and Devices Division posted revenue of $2.53 billion, an increase of 56% from the prior year period. Adjusting for the recognition of revenue related to the Video Game Deferral, the division’s non-GAAP revenue increased 33% for the third quarter.
Microsoft also announced that CFO Peter Klein will be leaving at the end of the current quarter after four years in his current role and nearly 11 with the company. The company says it will name a new CFO from its financial team within the next several weeks. “It has been a pleasure to work with Peter as CFO,” CEO Steve Ballmer said in a statement. “He’s been a key member of my leadership team and a strategic advisor to me, and I wish him the very best.”
At the end of the day, however, Microsoft did well —total net income for the quarter was $6.06 billion, up 18.5 percent year-over-year.
Earnings per share was higher than expected but revenue was slightly lower than expected.
Stay tuned for more about this earning report.
The Windows part of this report will be dissected for analysis about the PC industry and why earnings were flat.
Bottom line is that Microsoft is still a very strong company but their Windows Division may be stumbling a bit.
Interesting points to note – there’s no word on how many Windows 8 licenses were sold in the quarter or how many Surface devices were sold. Microsoft is hosting an earnings call later this afternoon, so hopefully the company will share more then
More to come…