Windows 7 leads the way to record quarter for Microsoft

Microsoft logoAt the close of trading Thursday, Microsoft announced the results for its second quarter of fiscal year 2010, which ended December 31, 2009. Revenue of $19.02 billion, a 14 percent increase from the same period of the prior year, set a new a record for the company. The three other financial measures—operating income ($8.51 billion), net income ($6.66 billion), and earnings per share ($0.74)—all were up year-over-year, 43 percent, 60 percent, and 57 percent, respectively.

So what is Microsoft's explanation for the positive growth across the board? Its latest client operating system. "Exceptional demand for Windows 7 led to the positive top-line growth for the company," said Peter Klein, chief financial officer at Microsoft. Furthermore, the recession hit the holiday quarter pretty badly in 2008, and while Redmond could not avoid it, its reaction in the form of various cuts is now paying off. "Our continuing commitment to managing costs allowed us to drive earnings performance ahead of the revenue growth."

Microsoft revealed that it had sold over 60 million Windows 7 licenses through the second quarter (which would explain the huge growth we're seeing in market share numbers). This not only made it a record quarter for Windows units in general, but it makes Windows 7 the fastest selling operating system in history.

When discussing the results from two quarters ago, Microsoft said it would defer some $275 million of revenue from prepaid upgrades to Windows 7. Microsoft actually ended up deferring $1.71 billion in revenue, which is about $0.14 of diluted earnings per share, relating to the Windows 7 Upgrade Option Program and presales of Windows 7 to OEMs and retailers before general availability. Taking that number into consideration, the revenue would actually total $17.31 billion, or about $0.60 per share.

Microsoft will be discussing second quarter results and the company's business outlook on a conference call and webcast, which we are liveblogging.

Source: ars technica

Tags: Microsoft, Windows 7

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