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Microsoft 'record' results beat Jedi mind trickery

Cloud company you are not

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Microsoft has reported record financial results for the quarter ending June 30, and the big money maker was Windows. Despite attempts at Jedi mind trickery involving cloud services, the company remains firmly wedded to the earth-bound PC.

Revenue for Windows jumped 43 per cent during the company's fiscal fourth quarter, to $4.54bn. Income for the Windows group came in at $3bn, up 58 per cent – a record, Microsoft said.

Windows helped nudge Microsoft's overall revenue performance up 23 per cent to $16bn for the quarter, with income growing 48 per cent to $4.5bn.

Twelve months back, it was a completely different story. Windows sucked Microsoft down into its second ever year-on-year revenue decline – a bigger decline than the previous one, which had come just a quarter earlier. A year ago, revenue from Windows fell 28 per cent to $3.1bn, with income down 33.3 per cent to $2.1bn, sending Microsoft's overall revenue down 17 per cent to $13bn.

Microsoft's Server and Tools, Onine, Office, and Entertainment and Devices divisions also fell last year. But this time around, S&T, Online, Office, and E&D all saw revenue growth.

S&T grew 28 per cent to $1.54bn and the unit that's home to Office - Microsoft Business Division - was up 20 per cent to $3.2bn.

E&D – home to Windows Phone and Xbox - increased its losses to $172m from $141m, while Online, home to Bing, hit a $696m loss compared to $585m.

During its customary results call with Wall Street's guessmen and investors, Microsoft bullishly asserted that it's now a cloud services company. It pounded out references to availability of Windows Azure and Business Productivity Online Services (BPOS) and growth in market share for, um, Internet Explorer 8 and Bing.

When it came down to it, though, the numbers proved otherwise, and chief financial officer Peter Klein was forced to conceded that money from Windows Azure is "not material" to its financials. Microsoft is still trying to work out what to provide and how to charge people through Project Talisker.

Meanwhile, there was no word on what's planned for E&D, which is under temporary – we assume – control of chief executive Steve Ballmer as president Robbie Bach has resigned. Ballmer was not brought out for a Wall Street call that was cut in half from the usual hour in length.

For Microsoft's full year, the company reported a 28 per cent increase in revenue to $18.7bn on sales that grew 6.9 per cent to $624bn. Windows, S&T, and Online all grew, while E&D was flat on $8.05bn and MBD saw sales fall 1.4 per cent to $18.64bn.

In terms of income, Windows and S&T carried the day with 30 per cent and 14 per cent growth to $12.9bn and $5.49bn respectively. MBD was flat on $11.7bn while online and E&D all increased their losses to $2.3bn and $679m – up from $1.65bn and $108m respectively. ®

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