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Microsoft “Strong” But Windows 8 To Kill Rivals?

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The Redmond based giant announced revenue of $17.41 billion for the first three month (Q3) 2012, a 6% increase on 2011, with growth across most divisions, bar gaming which has gone “soft” it said today.

Operating income also rose up 12% to $6.37 bn on last year, and the figures beat analyst predictions with better Windows sales than widely expected.

Net incomes however fell 2.4% to $5.11bn, which Microsoft attributed to its $461 million tax settlement with the U.S. Internal Revenue Service the previous year.

Windows and Windows Live Division revenue jumped 4% to $4.62 bn, attributed to “strong” Windows 7 adoption, with enterprise desktops running W7 up to 40%.

Its Business Division, which includes Office, grew 9% to $5.81 bn revenues, reflecting the continued strength of Office 2010, the software giant said.

Microsoft enjoyed “strong demand for our business desktop and infrastructure offerings,” declared Peter Klein, Microsoft chief financial officer

The software giant has made major investments in the database and hybrid cloud for business customers which is and is now seeing “robust demand for our enterprise products and services,” Kevin Turner, chief operating officer added.

CEO Ballmer said Microsoft is anticipating the release of Windows 8 OS for smartphones, tabs and PC this year (rumor has it October in the US), as well as next version of Office.

“We’re driving toward exciting launches across the entire company, while delivering strong financial results,” said Steve Ballmer.

“With the upcoming release of new Windows 8 PCs and tablets, the next version of Office, and a wide array of products and services for the enterprise and consumers, we will be delivering exceptional value to all our customers in the year ahead.”

Online Services Division, which includes Bing search engine, reported revenue of $707 million, up 6%, after a major push on advertising, and is now the No. 2 search site in the US, according to analysts.

Microsoft’s Entertainment & Devices division, which includes Xbox gaming business posted $1.62 bn revenues, a 16% drop due to a “soft gaming console market.”

Xbox remained the top-selling console in the U.S. for the 15th consecutive month, the giant insisted, and is hoping newly announced  TV content partners will boost the love its 40 million Xbox Live gamers have for the console.

Microsoft revised operating expense guidance downward and is forecasting $28.3- $28.7 billion for full year ending June 30.

Other divisions including Server & Tools business posted a 14% increase on last year, driven by double-digit revenue growth in SQL Server and 20% in System Center.