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Microsoft Revenue Is Up Thanks to Windows 8, But Profit Declines

by on January 25, 2013
 

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Microsoft revenue increased to $21.46 billion (a 2.7 percent jump) for the second quarter of its fiscal year, which ended Dec. 31., partly because a 24 percent jump in sales from its Windows 8. Despite this good news for Microsoft, the profits of $6.4 billion were actually down 4%.  By comparison, Apple’s profits were up 13.5%.
The Business Division, which includes the Office suite, registered $5.69 billion in revenue, down 10 percent.

The Server & Tools business, which includes SQL Server and System Center, registered a revenue growth of 9 percent to $5.19 billion.

The Entertainment and Devices Division, which includes the Xbox products, had a revenue decline 11 percent to $3.77 billion. The company sold 5.9 million Xbox consoles, down 28 percent and Skype saw a 59 percent increase in call minutes.

In January, NPD Group mentioned that Windows 8 “did little to boost holiday sales or improve the year-long Windows notebook sales decline.” Later after this, Morgan Stanley financial analysts downgraded the firm’s recommendation on Microsoft’s stock from Overweight (the equivalent of “buy”) to Equal Weight (the equivalent of “hold”).

Microsoft is offering Windows 8 Pro upgrades at discounted prices as low as $14.99, but prices will shoot up after Jan. 31 to $199.99.

Another special offer lets you upgrade an existing Windows XP, Windows Vista or Windows 7 PC to Windows 8 Pro for $39.99 via Windows.com download or $69.99 from a retail store DVD.

After Jan. 31, people will also be able to upgrade for the first time to the regular version of Windows 8 for $119.99.

Microsoft CEO Steve Ballmer stated that the company’s “big, bold ambition to reimagine Windows,” along with other initiatives, like its Surface tablet device and the new Windows Phone 8 OS, are paying off with customers, partners and developers.