News

Microsoft Reports Across-the-Board Gains in Q3, Announces CFO Change

• By Kurt Mackie
• April 19, 2013

All of Microsoft's five divisions recorded gains in the company's fiscal third quarter financial results, the company announced Thursday.

Microsoft also announced the coming departure of Peter Klein, its chief financial officer for the last four years and an 11-year Microsoft veteran. Klein will help with the CFO transition during the next quarter. His replacement will be announced in the next few weeks.

Microsoft's overall revenue was $20.5 billion for the quarter, which ended on March 31, 2013. That figure was up 18%, compared year over year. Net income was $6.1 billion. Diluted earnings per share was $0.72, which was slightly lower than a whispered $0.73 per share.

Microsoft's Business Division brought in the most revenue at $6.3 billion, up 8% compared with last year's Q3 result. Next came the Windows Division, with $5.7 billion in revenue, up 23%. Server and Tools contributed $5.0 billion in revenue, up 11 percent. The Entertainment and Devices Division added $2.5 billion to the revenue mix, representing a whopping 56 percent increase year over year. Trailing the pack was the Online Services Division, with $832 million in revenue, up 18%.

Microsoft also provided non-GAAP revenue figures as a way to explain the performance of its divisions alongside promotional offers, such as the Windows and Office upgrade offers and a video game deferral offer, plus a fine by the European Commission. In March, Microsoft was hit with a $733 million fine for failure to deliver browser choice screens with copies of Windows 7 that were sold in European Union countries.

The company described achieving "double-digit percentage revenue growth in SQL Server and System Center" during the quarter. Xbox Live membership increased 18 percent, year over year, to reach more than 46 million members. Other details went undescribed in Microsoft's announcement. As usual, there were no Windows Phone sales revenue figures given. Surprisingly, there were no new figures announced on Windows 8 copies sold, nor details about Microsoft Surface device sales. In January, Microsoft said it had sold 60 million Windows 8 licenses.

The positive Windows Division revenues were surprising in the wake of a general slide in PC sales, which may or may not be made up by Windows 8 tablet sales. Intel, which had a bad first quarter, pointed to lower priced touch-based Windows 8 notebooks on the horizon, which could possibly boost unit sales, although not necessarily revenues.