Microsoft on Thursday announced record financial results for its latest quarterly and fiscal year, pretty much meeting analyst expectations across the board. But softness in the PC market led to a tiny slowdown in the company's Windows business, which will no doubt impact the company's stock price.
The company earned $5.87 billion in net income on revenues of $17.37 billion for the quarter ending June 30, 2011—an 8 percent increase from the same quarter a year ago. For the fiscal year, which also ended June 30, Microsoft reported net income of $23.15 billion on record revenues of $69.94 billion—a 12 percent increase from the prior year.
"Throughout fiscal 2011, we delivered to market a strong lineup of products and services which translated into double-digit revenue growth and operating margin expansion," Microsoft CFO Peter Klein said. "Our platform and cloud investments position us for long-term growth."
Many of Microsoft's businesses posted strong growth. Notably absent from this list, however, is the Windows and Windows Live division, which actually saw revenues decline by 1 percent in the quarter and by 2 percent for the fiscal year. The software giant estimated that its full-year revenue growth was in line with PC market growth, which it pegged at 2 to 4 percent.
The Microsoft Business division saw huge gains in both the quarter (7 percent) and the full year (16 percent), thanks to stronger-than-expected Office 2010 sales of more than 100 million units in its first year in the market. Server and Tools was likewise up (12 percent for the quarter, 11 percent for the year) with "Windows Server, System Center, and SQL Server continuing to drive revenue growth in the segment."
Online Services jumped 17 percent in the quarter and 15 percent in the year, thanks to increased search revenue through Bing. And Entertainment and Devices grew a whopping 30 percent and 46 percent, respectively, riding the back of renewed momentum in the Xbox 360 and Kinect. Microsoft noted that the Xbox 360 has now been the best-selling video game console in the United States for all of the previous 12 months.