Quantcast

Microsoft Earnings Released, Company Posts $16.01 Billion In Revenue

Get the WebProNews Newsletter:
Microsoft Earnings Released, Company Posts $16.01 Billion In Revenue
[ Business]

Microsoft managed to release its FY13 Q1 earnings report today without all the craziness that accompanied Google’s.

Revenue was $16.01 billion for the quarter. Operating income, net income, and diluted earnings per share for the quarter were $5.31 billion, $4.47 billion, and $0.53 per share.

CEO Steve Ballmer said, “The launch of Windows 8 is the beginning of a new era at Microsoft. Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners.”

CFO Peter Klein added, “While enterprise revenue continued to grow and we managed our expenses, the slowdown in PC demand ahead of the Windows 8 launch resulted in a decline in operating income. Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and Microsoft Business Division products as businesses commit to our technology roadmap.”

Microsoft shares are down 2.35% in after hours trading.

Here’s the release in its entirety:

Microsoft Reports First-Quarter Results

Upcoming launches of key products and services position Microsoft for long-term profit growth.

 

REDMOND, Wash. — Oct. 18, 2012 — Microsoft Corp. today announced quarterly revenue of $16.01 billion for the quarter ended Sept. 30, 2012. Operating income, net income, and diluted earnings per share for the quarter were $5.31 billion, $4.47 billion, and $0.53 per share.

These financial results reflect the deferral of $1.36 billion of revenue and $0.13 of diluted earnings per share, due to the Windows Upgrade Offer, pre-sales of Windows 8 to OEMs prior to general availability, and the Office Offer.

 

 

Three Months Ended September 30,

Percentage Change

(In millions, except per share amounts and percentages)

Revenue

Operating income

Diluted EPS

Revenue

Operating income

Diluted EPS

2011 As Reported (GAAP)

$17,372

$7,203

$0.68

 

 

 

2012 As Reported (GAAP)

$16,008

$5,308

$0.53

(8)%

(26)%

(22)%

Revenue deferred for Windows Upgrade Offer, Windows 8 Pre-sales, and Office Offer

$1,356

$1,356

$0.13

      

 

 

2012 As Adjusted (Non-GAAP)

$17,364

$6,664

$0.65

0%

(7)%

(4)%

 

Totals may not foot due to rounding

 

“The launch of Windows 8 is the beginning of a new era at Microsoft,” said Steve Ballmer, chief executive officer at Microsoft. “Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners.”

The Server & Tools business reported $4.55 billion in first-quarter revenue, an 8% increase from the prior year period, driven by double-digit revenue growth in SQL Server and more than 20% growth in System Center revenue. In September, Microsoft continued to enrich its server offerings with the launch of Windows Server 2012.

The Microsoft Business Division posted $5.50 billion in first-quarter revenue, a 2% decrease from the prior year period. Adjusting for the impact of the Office Offer, Microsoft Business Division non-GAAP revenue increased 1% for the first quarter. Microsoft’s productivity server offerings – including Lync, SharePoint, and Exchange – continued double-digit revenue growth.

“While enterprise revenue continued to grow and we managed our expenses, the slowdown in PC demand ahead of the Windows 8 launch resulted in a decline in operating income,” said Peter Klein, chief financial officer at Microsoft. “Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and Microsoft Business Division products as businesses commit to our technology roadmap.”

The Windows & Windows Live Division posted revenue of $3.24 billion, a 33% decrease from the prior year period. Adjusting for the impact of the Windows Upgrade Offer and pre-sales of Windows 8 to OEMs prior to general availability, Windows division non-GAAP revenue declined 9% for the first quarter. Windows 8 will become generally available October 26, 2012.

“We’re incredibly excited to be approaching general availability of Windows 8 and Windows RT,” said Kevin Turner, Microsoft chief operating officer.  “We’ve already certified more than 1,000 systems for Windows 8 from our hardware partners, ranging from the smallest tablets and convertibles to touch-enabled ultrabooks and all-in-ones to the most powerful desktop computers.”

The Online Services Division reported revenue of $697 million, a 9% increase from the prior year period. Online advertising revenue grew 15% driven primarily by an increase in revenue per search.

The Entertainment and Devices Division posted revenue of $1.95 billion, a decrease of 1% from the prior year period. Xbox continues to be the top-selling console in the U.S., where it now has 49% market share. Windows Phone 8 will launch this fall with an expanded array of products, prices, carriers, and markets. Skype continued its rapid growth and now has over 280 million users.

Business Outlook

Microsoft reaffirms fiscal year 2013 operating expense guidance of $30.3 billion to $30.9 billion.

Webcast Details

Peter Klein, chief financial officer, Frank Brod, chief accounting officer, and Bill Koefoed, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor. The webcast will be available for replay through the close of business on Oct. 18, 2013.

Adjusted Financial Results and Non-GAAP Measures

In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information to aid investors in better understanding the company’s performance. For first quarter fiscal year 2013 revenue, operating income, and earnings per share growth, we included the impact of revenue deferred during the first quarter of fiscal year 2013 relating to the Windows Upgrade Offer, pre-sales of Windows 8 to OEMs prior to general availability, and the Office Offer. Presenting these measures without the impact of these items gives additional insight into operational performance and helps clarify trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance. These non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Non-GAAP Reconciliations

 

 

(In millions, except percentages)

Three Months Ended

September 30,

Percentage Change

2011 As Reported WWLD revenue (GAAP)

$4,874

 

2012 As Reported WWLD revenue (GAAP)

$3,244

(33)%

Revenue deferred for Windows Upgrade Offer and Windows 8 Pre sales

$1,167

 

2012 As Adjusted WWLD revenue (Non-GAAP)

$4,411

(9)%

 

 

(In millions, except percentages)

Three Months Ended

September 30,

Percentage Change

2011 As Reported MBD revenue (GAAP)

$5,635

 

2012 As Reported MBD revenue (GAAP)

$5,502

(2)%

Revenue deferred for Office Offer

$189

 

2012 As Adjusted MBD revenue (Non-GAAP)

$5,691

1%

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

  • intense competition in all of Microsoft’s markets;
  • execution and competitive risks in transitioning to cloud-based computing;
  • significant business investments that may not gain customer acceptance and produce offsetting increases in revenue;
  • Microsoft’s continued ability to protect its intellectual property rights;
  • claims that Microsoft has infringed the intellectual property rights of others;
  • the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;
  • cyber-attacks and security vulnerabilities in Microsoft products that could reduce revenue or lead to liability;
  • improper disclosure of personal data that could result in liability and harm to Microsoft’s reputation;
  • outages and disruptions of services provided to customers directly or through third parties if Microsoft fails to maintain an adequate operations infrastructure;
  • government litigation and regulation affecting how Microsoft designs and markets its products;
  • Microsoft’s ability to attract and retain talented employees;
  • delays in product development and related product release schedules;
  • unfavorable changes in general economic conditions, disruption of our partner networks or sales channels, or the availability of credit that affect demand for Microsoft’s products and services or the value of our investment portfolio;
  • adverse results in legal disputes;
  • unanticipated tax liabilities;
  • quality or supply problems in Microsoft’s consumer hardware or other vertically integrated hardware and software products;
  • impairment of goodwill or amortizable intangible assets causing a charge to earnings;
  • exposure to increased economic and regulatory uncertainties from operating a global business;
  • geopolitical conditions, natural disaster, cyber-attack or other catastrophic events disrupting Microsoft’s business; and
  • acquisitions, joint ventures and strategic alliances that adversely affect the business.

For further information regarding risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/investor.

All information in this release is as of Oct. 18, 2012. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, press only:

Rapid Response Team, Waggener Edstrom Worldwide, (503) 443-7070,rrt@waggeneredstrom.com

 

For more information, financial analysts and investors only:

Bill Koefoed, general manager, Investor Relations, (425) 706-4400

 

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news/. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. PDT conference call with investors and analysts, is available at http://www.microsoft.com/investor.

MICROSOFT CORPORATION

INCOME STATEMENTS

(In millions, except per share amounts) (Unaudited)

Three Months Ended September 30,

 

2012

 

2011

Revenue

 $         16,008

 $    17,372

Cost of revenue

4,168

3,777

  Gross profit

11,840

13,595

Operating expenses:
  Research and development

2,460

2,329

  Sales and marketing

2,945

2,900

  General and administrative

1,127

1,163

    Total operating expenses

6,532

6,392

Operating income

5,308

7,203

Other income

226

103

Income before income taxes

5,534

7,306

Provision for income taxes

1,068

1,568

Net income

 $           4,466

 $      5,738

Earnings per share:
  Basic

 $            0.53

 $       0.68

  Diluted

 $            0.53

 $       0.68

Weighted average shares outstanding:
  Basic

8,396

8,392

  Diluted

8,494

8,490

Cash dividends declared per common
share

 $            0.23

 

 $       0.20

 

 

MICROSOFT CORPORATION

COMPREHENSIVE INCOME STATEMENTS

(In millions) (Unaudited)

Three Months Ended September 30,

 

2012

 

2011

Net income

 $           4,466

 $      5,738

Other comprehensive income (loss):
  Net unrealized gains (losses) on derivatives (net of
tax effects of $(24), and $86)

(45)

160

  Net unrealized gains (losses) on investments (net of
tax effects of $148, and $(619))

274

(1,149)

  Translation adjustments and other (net of tax effects
of $91, and $(66))

169

(123)

      Other comprehensive income (loss)

398

(1,112)

Comprehensive income

 $           4,864

 $      4,626

 

 

MICROSOFT CORPORATION

BALANCE SHEETS

(In millions)(Unaudited)

 

September 30,
2012

 

June 30, 2012

Assets
Current assets:
  Cash and cash equivalents

 $            5,036

 $      6,938

  Short-term investments (including securities
loaned of $400 and $785)

61,608

56,102

    Total cash, cash equivalents, and short-term
investments

66,644

63,040

  Accounts receivable, net of allowance for doubtful
accounts of $265 and $389

9,871

15,780

  Inventories

1,624

1,137

  Deferred income taxes

2,052

2,035

  Other

3,860

3,092

    Total current assets

84,051

85,084

Property and equipment, net of accumulated
depreciation of $11,401 and $10,962

8,329

8,269

Equity and other investments

10,038

9,776

Goodwill

14,466

13,452

Intangible assets, net

3,423

3,170

Other long-term assets

1,569

1,520

        Total assets

 $         121,876

 $  121,271

Liabilities and stockholders’ equity
Current liabilities:
  Accounts payable

 $            3,631

 $      4,175

  Current portion of long-term debt

2,236

1,231

  Accrued compensation

2,666

3,875

  Income taxes

847

789

  Short-term unearned revenue

18,295

18,653

  Securities lending payable

415

814

  Other

3,312

3,151

    Total current liabilities

31,402

32,688

Long-term debt

9,714

10,713

Long-term unearned revenue

1,292

1,406

Deferred income taxes

2,209

1,893

Other long-term liabilities

8,423

8,208

    Total liabilities

53,040

54,908

Commitments and contingencies
Stockholders’ equity:
  Common stock and paid-in capital – shares
authorized 24,000; outstanding 8,422 and 8,381

66,084

65,797

  Retained earnings (deficit)

932

(856)

  Accumulated other comprehensive income

1,820

1,422

    Total stockholders’ equity

68,836

66,363

        Total liabilities and stockholders’ equity

 $         121,876

 $  121,271

 

MICROSOFT CORPORATION

CASH FLOW STATEMENTS

(In millions) (Unaudited)

Three Months Ended September 30,

 

2012

 

2011

Operations
Net income

 $           4,466

 $      5,738

Adjustments to reconcile net income
to net cash from operations:
  Depreciation, amortization, and
other

710

726

  Stock-based compensation
expense

603

558

  Net recognized losses (gains) on
investments and derivatives

11

(30)

  Excess tax benefits from
stock-based compensation

(177)

(70)

  Deferred income taxes

38

402

  Deferral of unearned revenue

8,209

6,139

  Recognition of unearned revenue

(8,770)

(7,653)

  Changes in operating assets and
liabilities:
    Accounts receivable

6,156

4,733

    Inventories

(473)

(920)

    Other current assets

(385)

260

    Other long-term assets

(233)

(75)

    Accounts payable

(567)

(442)

    Other current liabilities

(1,287)

(993)

    Other long-term liabilities

183

120

        Net cash from operations

8,484

8,493

Financing
Common stock issued

417

336

Common stock repurchased

(1,632)

(1,934)

Common stock cash dividends paid

(1,676)

(1,341)

Excess tax benefits from
stock-based compensation

177

70

        Net cash used in financing

(2,714)

(2,869)

Investing
Additions to property and equipment

(603)

(436)

Acquisition of companies, net of
cash acquired, and purchases of
intangible and other assets

(1,145)

(875)

Purchases of investments

(20,138)

(11,299)

Maturities of investments

1,259

2,825

Sales of investments

13,307

7,536

Securities lending payable

(399)

(66)

        Net cash used in investing

(7,719)

(2,315)

Effect of exchange rates on cash
and cash equivalents

47

(38)

Net change in cash and cash
equivalents

(1,902)

3,271

Cash and cash equivalents,
beginning of period

6,938

9,610

Cash and cash equivalents, end of
period

 $           5,036

 $    12,881

 

 

MICROSOFT CORPORATION

 

 

 

SEGMENT REVENUE AND OPERATING INCOME (LOSS)

(In millions) (Unaudited)

 

 

 

 

 

Three Months Ended September 30,

 
 

2012

 

2011

Revenue

 

 

Windows & Windows Live Division

 $           3,244

 

 $      4,874

Server and Tools

4,552

 

4,216

Online Services Division

697

 

641

Microsoft Business Division

5,502

 

5,635

Entertainment and Devices Division

1,946

 

1,961

Unallocated and other

67

 

45

  Consolidated

 $         16,008

 

 $    17,372

 

 

 

Operating income (loss)

 

 

Windows & Windows Live Division

 $           1,646

 

 $      3,270

Server and Tools

1,748

 

1,565

Online Services Division

(364)

 

(514)

Microsoft Business Division

3,646

 

3,717

Entertainment and Devices Division

19

 

340

Corporate-level activity

(1,387)

 

(1,175)

  Consolidated

 $           5,308

 

 $      7,203

Microsoft Earnings Released, Company Posts $16.01 Billion In Revenue
Comments Off
Top Rated White Papers and Resources

Comments are closed.

  • Join for Access to Our Exclusive Web Tools
  • Sidebar Top
  • Sidebar Middle
  • Sign Up For The Free Newsletter
  • Sidebar Bottom