Wow! Microsoft's record financial year beats street

Steve Ballmer (Der Tommy @ Picasaweb)
By Richi Jennings (@richi ) - July 22, 2011.

[Updated with more about Windows Revenues]

Microsoft (NASDAQ:MSFT) released its year-end results last night, and they were far better than expected. Revenues and profit were up almost across the board, with earnings 17% higher than expected. But there's still an ugly comparison with Apple (NASDAQ:AAPL). In IT Blogwatch, bloggers run the numbers.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: Footage from every Shuttle mission edited together; simply brilliant...

Joab Jackson reports "a banner fiscal year":

For the fiscal year ending June 30, Microsoft generated $69.94 billion in revenue, an all-time high. ... $23.15 billion was net income, a 23 percent increase.


Microsoft Business Division's revenue for the fourth quarter grew by 16 percent for the year...thanks to the recent launch of Microsoft Office 2010. ... The division reported...$22 billion [revenue] for the full year, eclipsing revenue of Microsoft's flagship Windows and Windows Live Division...[which] actually declined by 2 percent.


Microsoft's Server and Tools division grew by 11 increased demand for Windows Server, System Center, and SQL Server continued. ... [Revenues were] $17 billion for the year. ... Overall, businesses provided more of a boost...than consumers. Consumer revenue around PCs declined 8 percent while business sales...grew by 27 percent.   

    Rik Myslewski adds:

Microsoft beat earnings-per-share predictions...bringing in 69 cents a share when the analysts had predicted 59.


The Online Services Division...[grew] 15 per cent year-on-year. ... Microsoft asserted that Bing's search market share is now 14.4 per cent. ... [The] Entertainment & Devices Division...[grew] 45 per cent for the full year "due to the ongoing momentum of the console, Kinect, and Xbox Live."


If only that laggardly Windows...Division would join the party. We're assuming that Ballmer & Co. are crossing their...fingers for that to happen with...Windows 8.   

 But Peter Bright shines a light on Windows:

These figures are impacted by having revenue for Windows 7 booked prior to its launch, with Microsoft estimating that...[Windows] experienced growth of 2-4 percent, in line with the growth of the PC market. ... [B]usiness PC growth is up 8 percent year on year, offset somewhat by a decline in consumer PCs of 2 percent.


Microsoft expects Windows...will grow in line with the PC market, with the emerging markets and businesses outpacing growth in developing markets and consumers. ... Windows revenue remained strong, suggesting that...tablets...haven't yet started to make serious inroads on PC sales. ... Nonetheless, investors can't help but notice...Apple['s] explosive growth...revenue growth of 82 percent...and profit growth of 121.9 percent.   

Now nixing "nuts" naysayers, it's Matt Rosoff:

Microsoft keeps turning in solid -- if unspectacular -- quarters...[b]y selling long-term software contracts to big companies and government agencies. ... That gives Microsoft's sales force a chance to go in and get customers to add additional software. ... That's exactly what seems to have happened this quarter.


Financial analysts who cover Microsoft know to look out for...unearned that Microsoft has collected...but hasn't yet recognized as revenue. ... [I]t sets the money aside and gradually recognizes it over the term of the payment. ... At the end of June, Microsoft had $17.1 billion of this unearned revenue...way ahead of what most analysts were expecting.


In other words, Microsoft's sales force is doing a great job.   

  Meanwhile, the pseudonymous Mini-Microsoft muses:

Windows Phone, as loved as it might be...just ain't selling much. ... The iPad continues to suck in consumer love and money...that we'd prefer they send our way.


Windows 8 ARM tablets? Sometime next year...our take of squeezing an elephant into a VW bug. ... I have to say it's fascinating watching Sinofsky wrangle the Windows organization in this long game of reshaping itself.


[W]hen the hell is Bing going to stop losing money?!? ... Come on, if Xbox did it, so can you!   

And Finally...
Footage from every Shuttle mission edited together; simply brilliant
[hat tip: Mike Landers, via LouLouK]

Don't miss out on IT Blogwatch:

Richi Jennings, your humble blogwatcher

Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. He's the creator and main author of Computerworld's IT Blogwatch -- for which he has won American Society of Business Publication Editors and Jesse H. Neal awards on behalf of Computerworld. He also writes The Long View for IDG Enterprise. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: You can also read Richi's full profile and disclosure of his industry affiliations.

Copyright © 2011 IDG Communications, Inc.

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