Menu
Windows sales pause hits Microsoft results

Windows sales pause hits Microsoft results

Microsoft's net income fell 28 percent year over year for its 2007 second fiscal quarter as it spent ahead of its mass market launch of Windows Vista this month.

Revenue was up six percent despite the fact that the company deferred US$1.64 billion of revenue and operating income from its second quarter to its third because of Windows Vista and Office 2007 coupons issued over the winter holidays.

For the second quarter ended December 31, 2006, Microsoft reported revenue of $12.54 billion on net income of $2.63 billion, or $0.26 earnings per share (EPS). Both revenue and EPS were ahead of estimates from Thomson Financial analysts, who predicted Microsoft would earn $12.1 billion, or $0.23 per share.

However, while revenue was up, net income and EPS were down for the same time period last year, when Microsoft reported revenue of $11.84 billion and net income of $3.65 billion, or $0.34 per share. Analysts were expecting a drop in earnings for the vendor as it gears up for the biggest consumer release of its Windows OS in five years on Tuesday. Microsoft has been spending a considerable amount of money to market Windows Vista, and will hold launch events around the world on Monday and Tuesday to mark the consumer debut of the OS.

The drop in net income also can be attributed to a pause in demand for Windows and other products as consumers prepare for the release of Vista, analysts say.

The deferral of revenue and operating income, as well as the deferral of $1.13 billion of net income and $0.11 of diluted EPS to the second quarter are due primarily to technology guarantee programmes Microsoft unveiled on October 24, 2006, for Windows Vista and Microsoft Office, Microsoft said. Those programmes provided customers purchasing new PCs capable of running Windows Vista with coupons to buy discounted upgrades to Vista and Office 2007 when they became available on January 30. Microsoft originally expected to have both software packages out in time for the busy holiday shopping season in 2006, but had to delay both releases.

Looking ahead to its fiscal third quarter, which ends March 31 and will reflect the initial impact of Windows Vista and Office 2007 consumer sales, Microsoft expects revenue in the range of $13.7 billion to $14 billion, including the $1.68 billion revenue deferral. Operating income is expected to be in the range of $6.1 billion to $6.3 billion, and EPS are expected to be $0.45 to $0.46.

For the full fiscal year ending June 30, 2007, Microsoft expects revenue in the range of $50.2 billion to $50.7 billion; operating income in the range of $19.3 billion to $19.7 billion; and diluted EPS in the range of $1.45 to $1.47.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Microsoft

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments