Microsoft Reports Record Third-Quarter Revenue
Net income and diluted earnings per share for the quarter were $5.11 billion and $0.60 per share, compared with $5.23 billion and $0.61 per share, respectively, in the prior year period. Prior year net income and diluted earnings per share included a $461 million or $0.05 per share tax benefit primarily related to a tax settlement with the U.S. Internal Revenue Service.
"We're driving toward exciting launches across the entire company, while delivering strong financial results," said Steve Ballmer, chief executive officer at Microsoft. "With the upcoming release of new Windows 8 PCs and tablets, the next version of Office, and a wide array of products and services for the enterprise and consumers, we will be delivering exceptional value to all our customers in the year ahead."
The Server & Tools business posted $4.57 billion in third-quarter revenue, a 14% increase from the prior year period, driven by double-digit revenue growth in SQL Server and more than 20% growth in System Center revenue.
The Microsoft Business Division reported $5.81 billion in third-quarter revenue, a 9% increase from the prior year period, reflecting the continued strength of Office 2010 with businesses and consumers. Dynamics posted an 11% revenue increase from the prior year period, with Dynamics CRM revenue growing more than 30%.
The Windows and Windows Live Division posted revenue of $4.62 billion, a 4% increase from the prior year period. Strong Windows 7 adoption continued with enterprise desktops on Windows 7 now up to 40% worldwide.
"We saw strong demand for our business desktop and infrastructure offerings," said Peter Klein, chief financial officer at Microsoft. "Solid revenue growth and continued cost discipline drove double-digit operating income growth."
The Online Services Division reported revenue of $707 million, a 6% increase from the prior year period, and operating loss improvement of approximately $300 million.
The Entertainment & Devices Division posted revenue of $1.62 billion, a decrease of 16% from the prior period due to a soft gaming console market. Xbox remained the top-selling console in the U.S. for the 15th consecutive month, and the company announced new television content partners and experiences for its 40 million Xbox LIVE members.
"We continue to execute well across our businesses, and we are seeing robust demand for our enterprise products and services," said Kevin Turner, chief operating officer at Microsoft. "Our investments and offerings in the database platform and public, private, and hybrid cloud are helping our customers transform their operations to meet today's evolving business demands."
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