For all the talk that Apple’s iPad would hurt Windows 7, Microsoft is proving it can battle in the operating-system world with its latest version. In fact, Microsoft on Thursday announced record first-quarter revenue of $16.20 billion — an impressive 25 percent increase from the year-ago period.
Operating income was $7.12 billion, a 59 percent increase over the year-ago period. Net income rose to $5.41 billion, a 51 percent increase, and diluted earnings per share climbed to 62 cents, a 55 percent increase. The news caused Microsoft’s shares, which dipped 14 percent this year, to regain some of their value.
“This was an exceptional quarter, combining solid enterprise growth and continued strong consumer demand for Office 2010, Windows 7, and Xbox 360 consoles and games,” said Peter Klein, CFO at Microsoft. “Our ability to grow revenue while continuing to control costs allowed us to deliver another quarter of year-over-year margin expansion.”
Growth Across the Board
Microsoft saw year-over-year growth across all business segments during its fiscal first quarter. For example, Office 2010 is off to a fast start with revenue growing more than 15 percent in its first full quarter on the market. And Microsoft said it continues to see a healthy and sustaining business PC refresh cycle.
Xbox 360 sales grew 38 percent, outselling every competing gaming console in the U.S. for each of the past four months. Those numbers are expected to rise in the second quarter as the Xbox 360 Kinect system makes its market debut. Bing also continued to see market-share growth even as Microsoft and Yahoo reached major milestones in implementing their partnership.
“We are seeing improved business demand and adoption. Our enterprise agreement rates were strong, reflecting business commitment to Windows 7, Office 2010, and our server and database products,” said Kevin Turner, Microsoft’s COO. “Customer demand and excitement…