Microsoft posted on Thursday modest results marred by a slow PC market for its first quarter for the financial year 2013.

The software giant revealed that had a profit of $4.47 billion for the three-month period ending in September 30 on revenues of $16 billion.

Those figures are lower 8 percent than Microsoft’s $17.4 billion revenue and $5.7 billion profit for the same quarter last financial year 2012.

However, the software behemoth says that when you account for $1.356 billion of revenue suspended for “Windows Upgrade Offer, pre-sales of Windows 8 to OEMs prior to general availability, and the Office Offer,” the company had a flat quarter when compared to its Q1 FY 2012 result.

The report comes as Microsoft is gearing to launch new products like the Windows 8 operating system and the Microsoft Surface tablets beginning this month up to early 2013.

Microsoft CEO Steve Ballmer has said that Windows 8 marks “the beginning of a new era” for the company.

For the full Microsoft summary as well as unaudited tables rife with data for our readers who love that stuff, read after the break.

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.

 

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

Source: Microsoft

About Solon Harmony Dolor

A passion for technology and journalism makes this upcoming writer very interested in social media and technology news. Fresh from finishing an English and Journalism degree from the University of the Philippines Diliman, he aims to bring interesting news to our readers .