Microsoft profits up a third, but now behind Apple

Darren Allan
Darren Allan -

Microsoft has just announced its third quarter results, and while reasonably healthy on the whole, there are weaker areas, and they don’t measure up to Apple’s latest fiscal figures.

Revenue for the quarter which ended in March was $16.4 billion, up 13% year-on-year, and net income was $5.2 billion, which was up a healthy 31%.

However, Apple recently announced it had doubled its profits up to $5.99 billion, eclipsing Microsoft’s figure. Apple’s revenue was $24.7 billion.

The disappointing sectors for Microsoft were the Windows operating system, which was down 4% due to the slowdown in PC sales. Tablets, both the iPad and Android, have been eating into laptop sales to some extent.

While online services were up 14% year-on-year, with MS claiming Bing’s US search market share has increased to 13.9%, heavy investment on the online side meant an operating loss of over $700 million.

Windows Phone 7 wasn’t even mentioned in Microsoft’s release, and the OS seems to be scarcely mentioned whenever numbers are talked, from which we can draw our own conclusions.

The positive news was the Business Division growing 21% from the previous year, with Office 2010 becoming the fastest selling version of the suite in its history.

Server & Tools revenue was up 11%, and entertainment rocketed up 60% year-on-year, propelled by Kinect which has outsold Microsoft’s expectations. This month MS claimed to have shipped out 10 million motion controllers (as opposed to Sony with 8 million for Move).

Peter Klein, CFO at Microsoft, noted: “We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses. Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications.”

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