On the heels of a successful Windows 7 launch, Microsoft on Friday announced revenue of $12.92 billion for the first quarter — a 14 percent decline from the same period a year ago. However, Microsoft beat the street’s expectations and the company’s stock soared.
Net income for the quarter was $3.57 billion, or 40 cents per share. That’s an 18 percent decline from the year-ago period. But Microsoft said the results reflect a deferral of $1.47 billion in revenue relating to the Windows 7 Upgrade Option program and sales of Windows 7 to OEMs and retailers before general availability. If added back in, Microsoft would have a four percent year-over-year decline in a tough economy.
“We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” said Chris Liddell, CFO at Microsoft. “We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions.”
A Trio of Wins
Microsoft cited three positive factors for the quarter: Windows 7 and Windows Server 2008 R2 launched globally on Oct. 22. Microsoft released Microsoft Exchange Server 2010 to manufacturing and in July announced a strategic partnership with Yahoo to provide search results for its global properties.
“The worldwide launches of Windows 7, Exchange Server 2010 and Windows Server 2008 R2 are exciting milestones for Microsoft, our partners and customers,” said Kevin Turner, COO at Microsoft. “We are pleased by the early positive response we are receiving for these products.”
Charles King, principal analyst at Pund-IT, was in New York for Thursday’s launch of Windows 7. From his perspective, Microsoft couldn’t have handled the launch any better. And other than a problem with an Adobe update, King said he hasn’t seen or heard about any glitches with the new operating system.
“The OS itself was very…