All numbers in millions of U.S. Dollars, three months ended 09/30/09.
Revenue – $12,920 [compared to $15,061 for three months ended 09/30/08]
Net Income (loss) – $3,574 [compared to $4,373 for three months ended 09/30/08]
Entertainment and Devices Division
Revenue – $1,891 [compared to $1,893 for three months ended 09/30/08]
Operating Income (loss) – $312 [compared to $159 for three months ended 09/30/08]
Full press release and links to financial statements after the break.
Windows and Xbox exceed expectations due to strong consumer demand; cost discipline drives earnings per share growth
REDMOND, Wash. — Oct. 23, 2009 — Microsoft Corp. today announced revenue of $12.92 billion for the first quarter ended Sept. 30, 2009, a 14% decline from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $4.48 billion, $3.57 billion and $0.40 per share, which represented declines of 25%, 18% and 17%, respectively, when compared with the prior year period.
These financial results reflect the deferral of $1.47 billion of revenue, an impact of $0.12 of diluted earnings per share, relating to the Windows 7 Upgrade Option program and sales of Windows 7 to OEMs and retailers before general availability. Adding back the deferred revenue, revenue totaled $14.39 billion, a 4% year-over-year decline, and EPS totaled $0.52 per share, an increase of 8% over the same period of the prior year.
“We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” said Chris Liddell, chief financial officer at Microsoft. “We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions.”
Windows 7 and Windows Server 2008 R2 launched globally on Oct. 22 as anticipated. Also during October, Microsoft released Microsoft Exchange Server 2010 to manufacturing and in July announced a strategic partnership with Yahoo! Inc. to provide search results for their 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, chief operating officer at Microsoft. “We are pleased by the early positive response we are receiving for these products.”
Microsoft is reducing operating expense guidance to $26.2 billion to $26.5 billion, for the full year ending June 30, 2010.
Management will discuss first-quarter results and the company’s business outlook on a conference call and webcast at 7:30 a.m. PDT (10:30 a.m. EDT) today.
Chris Liddell, senior vice president and chief financial officer, Frank Brod, corporate vice president and chief accounting officer, and Bill Koefoed, general manager of Investor Relations, will host a conference call and webcast at 7:30 a.m. PDT (10:30 a.m. EDT) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/msft. The webcast will be available for replay through the close of business on Oct. 23, 2010.
Adjusted Financial Results – Reconciliation of Non-GAAP Measures
3 Months Ended September 30, 2009 Year-over-Year Growth
($ in billions, except per share amounts) Revenue Diluted Earnings Per Share Revenue Diluted Earnings Per Share
As Reported per GAAP $12.92 $0.40 -14% -17%
Deferred Revenue for Windows 7
Upgrade Program and Pre-sales
As Adjusted (Non-GAAP) $14.39 $0.52 -4% 8%
This information has been provided to aid readers of the financial statements in further understanding the company’s financial performance. The impact of certain items and events on the financial results may not be indicative of trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance. The non-GAAP financial measures provided above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:
challenges to Microsoft’s business model;
intense competition in all of Microsoft’s markets;
Microsoft’s continued ability to protect its intellectual property rights;
claims that Microsoft has infringed the intellectual property rights of others;
the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;
actual or perceived security vulnerabilities in Microsoft products that could reduce revenue or lead to liability;
government litigation and regulation affecting how Microsoft designs and markets its products;
Microsoft’s ability to attract and retain talented employees;
delays in product development and related product release schedules;
significant business investments that may not gain customer acceptance and produce offsetting increases in revenue;
unfavorable changes in general economic conditions, disruption of our partner networks or sales channels, or the availability of credit that affect the value of our investment portfolio or demand for Microsoft’s products and services;
adverse results in legal disputes;
unanticipated tax liabilities;
quality or supply problems in Microsoft’s consumer hardware or other vertically integrated hardware and software products;
impairment of goodwill or amortizable intangible assets causing a charge to earnings;
exposure to increased economic and regulatory uncertainties from operating a global business;
geopolitical conditions, natural disaster, cyberattack or other catastrophic events disrupting Microsoft’s business;
acquisitions and joint ventures that adversely affect the business;
improper disclosure of personal data could result in liability and harm to Microsoft’s reputation; and
outages and disruptions of online services if Microsoft fails to maintain an adequate operations infrastructure.
For further information regarding risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations Web site at http://www.microsoft.com/msft.
All information in this release is as of Oct. 23, 2009. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.
Link to full press release and financial statements