Microsoft’s Quarterly Earnings Decline Ahead of Windows 8 Launch

Microsoft has released its earnings report for its first fiscal quarter, and the company’s revenue and income were both down. Observers said the poor showing was to be expected as the industry giant gears up for the launch of Windows 8 later this month, and some saw positive signs in the company’s financials.

According to eWeek’s Darryl K. Taft, “Microsoft reported a 22 percent decline in profit and a dip of 8 percent in revenues for its first fiscal quarter of 2013, as the company prepares for the launch of Windows 8 on Oct. 26. The software giant said the decline came as customers put off purchases to wait for Windows 8, which is expected to deliver a boost to Microsoft, its partners and developers.”

InformationWeek’s Paul McDougall noted, “Microsoft on Thursday reported that sales from its Windows division plunged 33% in the most recent quarter, but the news wasn’t all bad for the software maker. Pre-sales of Windows 8 came in at almost $800 million, 40% higher than comparable pre-sales for the successful Windows 7 OS.”

And Jane McEntegart from Tom’s Hardware added, “Microsoft’s Server & Tools business reported first-quarter revenue of an 8 percent increase from last year. Additionally, the company’s Online Services Division reported a revenue increase of 9 percent, equating to $697 million for the quarter, and a 15 percent increase in advertising revenue.”

MarketWatch quoted analyst Richard Williams of Cross Research, who said. “We expected [revenue] deferrals for Windows 8. If you eliminate that from the numbers, they had a surprisingly strong quarter.”