Microsoft has made public the financial results for the first quarter of the 2010 fiscal year, managing to beat forecasts. However, the Redmond company did report a drop in revenue compared to the same quarter of FY 2009. Essentially, Microsoft revealed that for the quarter ended on September 30, 2009, it accounted for revenue of just $12.92 billion. When compared to the revenue figures of Q1 2009, the software giant has suffered a 14% decline. In this regard, operating income, net income and diluted earnings per share have all been affected, going down to $4.48 billion, $3.57 billion and respectively $0.40 per share (illustrative of declines of 25%, 18% and 17%).
Still, Microsoft executives noted that the results were positive and that string customer demand had made the Windows and Xbox businesses exceed expectations. In all fairness, Microsoft’s financial results for the first quarter of FY 2010 have been superior to the figures mentioned above. Specifically, the results also include a deferral of $1.47 billion designed to fuel the Windows 7 Upgrade Option program. Through the Windows 7 Upgrade Option program Microsoft is supporting OEMs in order to continue selling Windows Vista computers by offering customers free upgrades to Windows 7.
“We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” noted Chris Liddell, chief financial officer at Microsoft. “We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions.”
According to the Redmond company, the $1.47 billion deferral delivered an impact of $0.12 of diluted earnings per share. Without the money that went to breathe life into the Windows 7 Upgrade Option program, Microsoft’s revenue would have totaled $14.39 billion. At $14.39 billion for Q1 2010, the company’s year-over-year decline would have been just 4%.
“The worldwide launches of Windows 7, Exchange Server 2010 and Windows Server 2008 R2 are exciting milestones for Microsoft, our partners and customers,” added Kevin Turner, chief operating officer at Microsoft. “We are pleased by the early positive response we are receiving for these products.”