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2019/04/25 14:25:08

Financial performance of Microsoft

This article is devoted to the overview of financial performance of the American corporation Microsoft. The main article about its stories - History of Microsoft.

Content

2019: Growth of revenue by 14% to $125.8 billion

In 2019 financial year of Microsoft gained $125.8 billion, having increased by 14% concerning the 2018th. Cloud business remains the main catalyst of financial growth of the company.

The division of Intelligent Cloud which is responsible for it for the 12-month reporting period which came to the end on June 30 2019 calendar year registered turnover in the amount of $39 billion against $32.2 billion the previous year.

Financial performance of Microsoft
Financial performance of Microsoft

The division of Productivity and Business Processes (office applications  of Office  and  Office 365 and also  Dynamics CRM customer relationship management system) received revenue in the amount of $41.2 billion at the end of 2019 a fiscal year. The previous year income was measured by $35.9 billion here. By the end of June, 2019 the number of users of Office 365 in a consumer sector reached 34.8 million.

In division of More Personal Computing (among other things is responsible for sales of licenses  of Windows and brings to Microsoft the most part of income) annual revenues raised from $42.3 billion to $45.7 billion. The head of department of investor relations in Microsoft Mike Spencer explained this rise with replacement of Windows 7 by Windows with 10 consumers and the companies and also the fact that some computer makers began to increase equipment stocks in anticipation of possible increase in duties. Spencer noted that Microsoft did not feel any influence from the American sanctions against Huawei.

The net profit of Microsoft in 2019 financial year turned out equal to $39.2 billion that is 137% more than an indicator of year prescription.

In day of the publication of annual accounts of Microsoft the quotation rate of the company increased by 2.66% and exceeded $140 (record result) at electronic biddings after closing of the exchange. Market capitalization of software giant reached $1.05 trillion. [1]

2018

Growth of revenue in a segment of software platform solutions based on AI for 139.4%

Infographics of IDC, 2019

Growth of revenue by 14% to $110.4 billion

For 2018 financial year which end fell on June 30 of the 2018th calendar revenue of Microsoft made $110.4 billion, having increased by 14% of rather previous year.

Annual revenues of division of More Personal Computing (among other things is responsible for sales of licenses  of Windows and brings to Microsoft the most part of income) increased from $39.2 billion to $42.3 billion. In the Intelligent Cloud group (server and cloud solutions) income rose from $27.4 billion to $32.2 billion.

Revenues in the main of division of Microsoft
Revenues in the main of division of Microsoft

The division of Productivity and Business Processes (office applications  of Office  and  Office 365 and also  Dynamics CRM customer relationship management system) finished reporting year with revenue in the amount of $35.9 billion that approximately for $6 billion exceeds an indicator of year prescription. By the end of June, 2018 the number of users of Office 365 in a consumer sector reached 31.4 million.

The net profit of Microsoft company in 2018 financial year decreased to $16.6 billion in many respects because of single expenses in $13.7 billion connected with carrying out tax reform in the USA. Besides, the American software giant spent $306 million for restructuring of sales and marketing.

In day of the publication of results of work in 2018 financial year of quotation of Microsoft increased more than by 4%. It occurred thanks to the fact that revenue of the company appeared above expectations of analysts. From the moment of Satya Nadella's arrival on a post of the CEO of corporation in 2014 its actions rose in price for 180% by July 19, 2018, and market capitalization in July, 2018 for the first time passed for $800 billion.

{{the quote|our early investments into the Intelligent Cloud and Intelligent Edge directions begin to pay off. We will continue to expand our opportunities in the big and growing markets using the differentiated innovations — Nadella's words are cited in the press release. [2]

The cost of Microsoft for the first time passed for $1 trillion

On April 24, 2019 capitalization of Microsoft for the first time in the history of corporation passed for $1 trillion. Stocks of software giant rose in price after the publication of financial statements: profit and revenue of Microsoft appeared above expectations of Wall Street.

For several minutes at midnight Moscow time the cost of securities increased up to $135.85, as a result the market value of Microsoft appeared higher than $1 trillion. To closing of the exchange the share price stopped on a mark of $125.01, and capitalization — for $959.1 billion. At preliminary biddings on April 25, 2019 by 3 p.m. Moscow time the quotation rate made $130.75.

Dynamics of a change in value of stocks of the leading technology companies
Dynamics of a change in value of stocks of the leading technology companies

Stocks of Microsoft exceeded a mark of $135 – that which was predicted by the profile analysts polled by Refinitv. To a release of the reporting experts called Microsoft underestimated. Experts assume that securities of the company can rise in price for 14.8% in annual perspective.

As of April 24, 2019 Apple remained the most expensive company in the world with capitalization of $981 billion, at Amazon the indicator was $945 billion. At Apple and Amazon cost exceeded $1 trillion earlier – in August and September, 2018 respectively, and at Microsoft it occurred for the first time. Since the beginning of 2019 of a stock of Microsoft rose in price for a quarter.

In the second half of 2018 of a stock of the technology companies, including Microsoft, became cheaper against the background of trade strength between the USA and China and also increase in a rate of money market by the U.S. Federal Reserve. In January, 2019 FRS did not begin to change a base rate because of concerns for the further growth of the American economy again. Many analysts and traders even expect that the central bank of the USA will go further, having lowered rates in 2019. It led to recovery of the stock markets, and demand for stocks of the technology companies became high again.[3]

Microsoft outstripped Apple and became the most expensive company

On November 23, 2018 Microsoft became the most expensive in the world the company, for the first time for long time having outstripped Apple. Actions of the last become cheaper because of the flat demand on new iPhones.

During trading at the Nasdaq exchange on Friday, November 23, market capitalization of Microsoft reached $753.34 billion, and the indicator of Apple fell to $746.82 billion. Closes the three of the most expensive companies Amazon with an indicator in $736.8 billion. The Alphabet holding with result in $726 billion was located with a trace.

Apple was inferior to Microsoft a rank of the most expensive company
Apple was inferior to Microsoft a rank of the most expensive company

As notes the Khaleej Times edition, the so-called group FAANG (Facebook, Amazon, Apple, Netflix and Google) goes through difficult times, So, on November 20, 2018 cumulative capitalization of these companies in one step decreased by $1.02 trillion. Participants of FAANG lost according to $253 billion, $280 billion, $253 billion, $67 billion and $164 billion cost.

The collapse of market value of Apple followed on news about bad sales of a line of new smartphones, especially to iPhone XR. Besides, investors the fact that in the last quarterly statement Apple refused to report quantitative indices of sales of the gadgets worried.

In the publication Khaleej Times it is noted that for the last decade stocks of the technology companies fueled growth of all stock market. During this time investors ceased to be afraid of the fact that the cost of such companies is inflated therefore continued to look narrowly and buy such securities.

However 2018 was issued difficult for the technology companies because of threat of regulation of the market, loss of trust to social networks after scandals with date leaks, weak forecasts for income and the expected increase in interest  rates  of the Federal  reserve  of the USA.

«
The market of software had the most predictable history of growth in economy. Now we are afraid of decrease in rates. People look forward to 2019 and say that expectations are too high — David Older, the director of a research of the stock market Carmignac told.[4]
»

Amazon is become in the history more expensive for the first time by Microsoft

In February, 2018 Amazon is become in the history more expensive for the first time by Microsoft. It occurred after the companies published financial reportings. Read more here.

2017

Revenue growth thanks to Office 365

In July, 2017 Microsoft published the annual report from which follows that revenues of the company grew thanks to the growing cloud business and high demand on Office 365 services.

For the reporting 12-month period which end fell on June 30, 2017 the net profit of Microsoft was $21.2 billion that is 26% more, than the previous year. Revenue rose by 5% to $90 billion.

Results of year of Microsoft: income grew thanks to clouds and Office 365
Results of year of Microsoft: income grew thanks to clouds and Office 365

Cloud and corporate solutions became the main stimulators of financial growth of Microsoft. In division of Productivity and Business Processes (office applications of Office and Office 365 and also Dynamics CRM customer relationship management system) annual revenues increased from 26.5 to 30.4 billion dollars. In structure of Intelligent Cloud (server and cloud solutions) income rose from 25 to 27.4 billion dollars. At the same time operating profit in both groups was reduced.

Also follows from the report that annual revenues from sales of cloud services to commercial clients exceeded $18.9 billion. Income from Office 365 for the first time appeared above sales of licenses for office software, the chief financial officer of Microsoft Amy Hood noted. By the end of June, 2017 more than 27 million consumers use Office 365 services. Corporate and private users refuse an old packet of Office for benefit of cloud subscriptions, bringing Microsoft stabler and repeating income, notes the Bloomberg agency.

According to analysts of Credit Suisse Group, Azure still lags behind Amazon Web Services (AWS), however more and more clients begin to work with a cloud platform of Microsoft.

The falling business is the division of More Personal Computing (is responsible for sales of licenses of Windows, tablets, phones, video game consoles). In 2017 financial year revenue made $38.8 billion against $40.4 billion in the 2016th here, and profit — $8.3 billion[5]

Value addition to $500 billion for the first time in 17 years

At the end of January, 2017 the cost of Microsoft exceeded $500 billion for the first time in 17 years. The quotations of the company rose after the publication of income which appeared above market expectations.

As data of the exchange Nasdaq testify, by the time of completion of biddings on January 27, 2017 securities of Microsoft rose in price for 2.4% and reached the highest value in the history of the company — $65.78 apiece. At the same time market capitalization did not update a record, but it was the highest since March, 2000 when Microsoft was estimated a little more than in $550 billion on January 27, 2017 the indicator grew to $523.5 billion.

Microsoft is included into the three of the most expensive companies in the world, being inferior only to Apple and Alphabet which market capitalizations made on January 27 642 and 570 billion dollars respectively.

Logo of Microsoft near one of offices of the company in the USA
Logo of Microsoft near one of offices of the company in the USA

Rise of share value of Microsoft happened after the publication of results of the second quarter of 2017 financial year (October-December of the 2016th calendar). For this period the corporation got net profit in the amount of $5.2 billion that is 3.6% more, than the previous year. The corrected revenue (without purchase of LinkedIn) made $25.8 billion, adjusted earnings — 84 cents on an action whereas the analysts polled by Thomson Reuters I/B/E/S expected indicators at the level of $25.3 billion and 79 cents on an action respectively.

In 12 months prior to publication of these results of a stock of Microsoft rose in price for 23.2%. At the same time revenue and the profit of the company appeared above expectations of Wall Street seven quarters from eight.

The Reuters agency notes that from the moment of Satya Nadella arrival to the management of Microsoft in February, 2014 stocks of the company considerably rose: then they cost $34, and capitalization of software giant was measured by $315 billion.

«
We begin to see important shift in a business model of Microsoft at which the profitability in the growing segments improves — analysts of RBC Capital Markets say.[6]
»

2016

The first falling of revenue in 7 years

On July 19, 2016 Microsoft published results of work in 2016 financial year. Revenue of the American company for the first time fell since 2009.

According to the results of 12-month reporting period closed on June 30, 2016 sales of Microsoft made $85.32 billion that is 8.8% less, than the previous year. Net profit at the same time increased — from $12.19 billion up to $16.8 billion. Operating profit reached $20.2 billion. In 2015 financial year of Microsoft the company made write-off of $7.5 billion spent for acquisition of division of Devices and Services Nokia.

Revenue of Microsoft fell for the first time since 2009
Revenue of Microsoft fell for the first time since 2009

One of the main reasons of decrease in revenue of Microsoft is the flat demand on personal computers. According to analysts of IDC, in 2015 the volume of the world market of the PC was reduced by record-breaking high value — 10.4%.

In 2016 financial year revenue of division of More Personal Computing (among other things is responsible for sales of licenses of Windows) fell to $40.5 billion from $43.2 billion. In the Intelligent Cloud group (server and cloud solutions) income rose by 5.6% to $25 billion.

The division of Productivity and Business Processes (office applications of Office and Office 365 and also Dynamics CRM customer relationship management system) finished reporting year with revenue in the amount of $26.5 billion that practically corresponds to an indicator of year prescription. Operating profit in this structure was reduced almost by 7% to $12.5 billion.

«
Last year was rotary and in our transformation, and in partnership with buyers who carry out the digital transformations. Microsoft Cloud gains essential steam, and we are capable to reach new opportunities next year — the CEO of Microsoft Satya Nadella reported.[7]
»

Also follows from the report of Microsoft that in April-June, 2016 Microsoft returned to the shareholders about $6.4 billion as dividends and share repurchase of stocks.

Microsoft states that the sales volume of its commercial cloud services in annual assessment reaches 14 bln. dollars. Officially turnover from commercial cloud services is estimated on revenue for the last month of quarter from Office 365 Azure, Dynamics 365 and other cloud assets with multiplication by 12.
Here what is told by the CEO of the company Satya Nadella: "Year on year our commercial turnover from a cloud exceeds 14 bln. dollars today, and we on the way to achievement of the goal to 20 bln. dollars in financial 2018. Users select Microsoft Cloud for the following reasons: they need global provider of hyper scalable clouds who can be trusted and who satisfies to requests of the corporate level. Along with cloud servers, they need support of the hybrid solutions which are built in hyper scalable service. They need the services of the increased level helping to build own digital resources, connected with IoT, the development of corporate applications advanced by analytics and functions of artificial intelligence. Moreover and that it is more important than everything, IT and cybersecurity directors, business development managers and developers see our advantages connected with operational coordination, performance and security, extending to all their digital resources including cloud security and abilities to manage of Windows 10, Office 365, Dynamics 365, Enterprise Mobility and Azure"[8].

Dynamics of a share of Microsoft in the market of smartphones

Leaders in sales of mobile phones and smartphones from 1992 to 2018 in animation are lower.

2015

Fall of profit twice because of expenses on Nokia

On July 21, 2015 Microsoft published the report for work in 2014-2015 financial year. The profit of the American corporation was cut almost by half because of drop in sales of Windows and expenses on the restructuring connected with accession of telephone business of Nokia.

It agrees the published Microsoft this, according to the results of 12-month reporting period closed on June 30, 2015 the net profit of the company was $12.2 billion against $22.1 billion the previous year. Operating profit for same the period fell to $18.2 billion from $27.8 billion. Revenue of the company year on year grew almost by 8%, having reached $93.6 billion.

$7.5 billion which are written off during restructuring of the company became the main reason of fall of profit of Microsoft

Fall of profit of Microsoft is in many respects connected with write-off of $7.5 billion during restructuring within which the mobile division of Nokia joined the company. Because of these unplanned costs in the fourth financial quarter (April-June, 2015) of Microsoft received a record loss in the history — $3.2 billion. In this amount expenses in $940 million for the programs of reduction of jobs announced in July of the 2015th and 2014 were considered.

"Our investment strategy to those areas where differentiation of business and potential of growth takes place, pays off. So, growth on products Surface, Xbox Bing Office 365, Azure also Dynamics CRM Online was at least two-digit — the CEO of Microsoft comments on financial statements Satya Nadella. — The forthcoming exit Windows 10 will create new opportunities for Microsoft and our ecosystem".

Also follows from the report of Microsoft that in 2014-2015 financial year of sale in division of Devices and Consumer Licensing where, in particular, receipts from licensing of OEM versions of Windows join, were reduced to $15 billion against $19.5 billion the previous year. Revenue in sales department of licenses to corporate clients for this period decreased to $41 billion from $42.1 billion. In telephone business turnover increased almost four times — up to $7.5 billion[9]

Financial reorganization of the company

On September 28, 2015 Microsoft announced financial reorganization within which the American corporation will publish data on revenues of three main divisions instead of former to seven. The software giant changes a reporting format taking into account the emphasis on cloud and mobile business.

According to Reuters with reference to the statement of Microsoft, revenue and operating profit of the company will be distirbuted on three divisions: Productivity and Business Processes, Intelligent Cloud and More Personal Computing.

7 divisions on which Microsoft reported earlier are united in 3
7 divisions on which Microsoft reported earlier are united in 3

Office applications of Microsoft Office and Office 365 and also customer relationship management system of Dynamics and Dynamics CRM are carried to Productivity and Business Processes.

In Intelligent Cloud income of server products and services, including the Windows Server operating systems, a cloud platform of Windows Azure and an analysis system and management of SQL Server relational databases will be considered.

The More Personal Computing segment will include sales of consumer electronics (tablets, smartphones, video game consoles, etc.) and also income from licensing of operating systems of Windows and the business connected with the search system Bing.

As specified to the Bloomberg agency the representative of Microsoft Cameron Bays, in structure of Microsoft there will also be a small Corporate and Other group which is responsible for deferred revenues.[10]

Before this reorganization cloud business, server solutions, Windows and Office were a part of division of the corporate products Commercial, and the consumer direction was supervised by structure of Devices & Consumer.

Microsoft will begin to report on a new system already in the first quarter 2016 financial year which will be closed at the end of September of the 2015th. The company will publish financial results of this period on October 22. Also Microsoft promises to issue the reports made taking into account reorganization for 2014 and 2015 financial years.[11]

Microsoft writes off $7.6 billion from the transaction with Nokia

On July 8, 2015 Microsoft announced write-off at a loss $7.6 billion from asset impairment connected with the transaction with Nokia. Besides, the software giant will spend $750-850 million for restructuring during which there is an integration of mobile division of Nokia to the main structure of Microsoft. It is going complete the most part of the program of reduction of jobs and transformation of business by the end of 2015 calendar year.

Microsoft recognizes that further perspectives of the company in the market of smartphones appeared below initial expectations. At the same time telephone business shows growth: in January-March, 2015 the company sold 8.6 million Lumia smartphones that is 18% more, than the previous year, and total revenue at the same time was $1.4 billion.

"We pass from strategy for independent development of mobile business to the strategy of creation and growth of an ecosystem of Windows including our first family of devices" — Satya Nadella said.

Sales of clouds at Microsoft grow, Windows - fall

On January 27, 2015 at the conference devoted to the publication of the quarter reporting of Microsoft, the CEO Satya Nadella told about progress of the company in the market of cloud computing.

In 2014 cloud solutions brought to Microsoft about $5.5 billion that approximately corresponds to the income of one of the largest market participant — Salesforce.com. In the market of commercial clouds Nadella connected success of Microsoft with projects Office 365, Azure and Dynamic CRM Online.

"The popularity of services of Azure grows among corporate clients and developers. At the same time we promptly improve hybrid services, solutions in the field of cloud data storage and virtualization and also we expand offers for work with data and their analysis — the head of Microsoft says. — Now the packet of Office 365 includes new program opportunities for phones and tablets thanks to what productivity of operation of gadgets increases. We continue to invest in solutions, significant for the companies, adding to Office 365 of a management system for mobile devices and functionality of Enterprise Mobility Suite".

In October-December, 2014 the number of subscribers of Office 365 Home and Personal grew by 2.1 million rather last quarter. The general user base of service reached 9.2 million, and revenue in this segment jumped by 150% year on year.

The volume of cloud business of Microsoft reached $5.5 billion

Though cloud computing generates only 5% of revenue of Microsoft, Satya Nadella pays special attention to this business, and it is not accidental. Before the arrival to the management of the company Nadella held a post of the executive vice president of division of Cloud and Enterprise and directed development of strategy of cloud computing.

Microsoft places emphasis on clouds in the conditions of falling of the core business connected with operating systems of Windows. In October-December, 2014 revenues of the company from licensing of Windows OEM Pro dropped by 13%. On the same value sales of licenses for normal versions of OS decreased. As a result the quarterly profit of software giant was reduced by 10%.

2014: 4th quarter of financial year: revenue of +8% to $26.6 billion

Total sales of the company in the fourth quarter were 2014 $26.6 billion that is 8% more, than in the same period of 2013.

Income from Azure Office 365, Dynamic CRM Online and other cloud services of the company Microsoft continues to grow. In a year revenue of division of cloud services grew by 114%, the company reported, the potential annual income from them is estimated at $5.5 billion.

Total sales of the company in the fourth quarter reached 2014 $26.6 billion that is 8% more, than in the same period of 2013. However net profit because of the expenses connected with restructuring and correction of taxes dropped almost by 12% to $5.86 billion.

Sales of Surface Pro 3 tablets raised income of division by 24% and exceeded $1 billion. At the same time the sales volume of the Xbox prefixes dropped by 20%, to $703 million. $2.3 billion more brought sales of cell phones.

From $5.5 billion income from licensing of consumer versions of a system Windows, Windows Phone and packets decreased to $4.2 billion Office 2013.

Satya Nadella, the CEO of Microsoft calculates that the release of Windows 10, even taking into account that the company within a year offers it free of charge to users of the previous versions, will create in the future a number of new opportunities for monetization.

2012

3rd quarter of financial year: revenue of +6% to $17.4 billion

In the third quarter 2012 financial year (came to the end on March 31) Microsoft earned $17.41 billion that is 6% more in comparison with the same period of year prescription. At the same time profit was reduced by 2.4% to $5.11 billion.

Income of division of Microsoft Server & Tools in the third quarter was $4.57 billion – 14.1% more than the same period of last financial year. Two-digit indicators of growth of sales volumes of SQL Server and more, than for 20%, increase in sales volumes in terms of money of System Center became the main premises for this purpose.

Income of division of Microsoft Business was $5.81 billion – 9.1% more than the same period of last financial year. It is mainly result of growth of popularity of Office 2010 among end users and in corporate environment. Sales returns of Dynamics grew by 11%, Dynamics CRM – more than for 30%.

The total revenues of divisions of Microsoft Windows and Microsoft Windows Live in comparison with the same period of year prescription grew by 4% too and were $4.62 billion. One of the reasons – sure penetration of Windows 7 on desktop PCs in a corporate segment where the share of OS reached 40%.

The listed above several divisions play a key role in revenue breakdown of Microsoft. According to Allan Krans (Allan Krans), the analyst of Technology Business Research (TBR), further financial progress of software giant directly will depend on capability timely to update product lines and to move towards wishes of consumers.

Steve Ballmer, the head of Microsoft, expressed satisfaction with the reached financial performance in the official statement. It expressed confidence that in the next calendar year his company will be able to provide a large number of products and services for ordinary consumers and corporate users. First of all, it is new Windows 8 OS for the PC and tablets and the next version of Office.

The first quarter loss in the history of the company

In July, 2012 Microsoft published data for the last financial quarter: for the first time in 26 years which passed since the corporation became public these results were negative.

Microsoft considers the reason of the failures purchase of aQuantive service for $6.3 billion in 2007 which did not promote strengthening of competitive positions of corporation in relation to Google: still in structure of its business only 4% of revenue are the share of online services. Still, Microsoft does the main revenue on sales of software, first of all Microsoft Windows and Microsoft Office.

Net loss of the company in the fourth financial quarter made $492 million or $0.06 for an action. In the same period the previous year the profit of corporation was $5.9 billion or $0.69 for an action. In general revenue for the fourth quarter grew by 4% and reached $18.06 billion.

The slight depression in the company is connected first of all with the fact that now all forces are thrown on an exit new operational the Windows 8 system which release is appointed to October 26, 2012. It is the most extreme redesign of a system from the moment of its entry into the market. The chief financial officer of corporation Peter Klein told analysts that he "according to expectations of the company, revenue from sales of Windows will be at the level of growth rates of the PC market" which at the moment shows negative dynamics, according to forecasts it will last till September, 2012.

Even if income from sale of Windows together with a release of the new version will remain flat, it nevertheless will be better, than that situation which developed in division currently: its income was reduced during five of the last network of reporting quarters. They decreased by 13% in the fourth quarter the weaving financial year to $4.1 billion.

1st quarter of financial year: Recession of sales for 8% to $16 billion

The quarterly profit of Microsoft fell below, than the expected 22% as sales of computers with the Windows operating system sharply decreased in anticipation of a release of new versions of the system and a packet of office applications of Microsoft Office.

This circumstance caused discontent of investors who underestimated effect of reduction of sales volumes of the PC so in the first hour of biddings they after the declaration of financial results of a stock of Microsoft decreased by 1.3%.

In the first quarter new financial year the profit of Microsoft was reduced to $4.47 billion in comparison with $5.74 billion in similar quarter the previous year.

In general sales to corporation decreased by 8% to $16.01 billion. On the general background positive were results of server division which is responsible including for data centers and cloud servers: its profit grew by 8% to $4.55 billion. The division of Windows showed the profit of $3.24 billion that is 33% less in annual terms.

Microsoft Business Division was generated by $5.5 billion that is 2% lower than the same period the previous year. The division of Online Services developped revenue for 9% to $697 million in many respects thanks to progress of the search system. The division of Entertainment and Devices which is responsible for entertaining services and release of devices showed $1.95 billion revenue (minus 1% to previous year).

2nd quarter of financial year: growth of revenue by 2.7%

Microsoft announced decrease in profit in the second quarter the next financial year though revenue of the company grew, and in many respects thanks to growth of revenue of division of Windows by 24%.

So, the reporting quarter ended on December 31, 2012, for this period revenue of the company increased by 2.7% to $21.46 billion. Net profit was reduced to $6.38 billion or $0.76 for an action from $6.62 billion or $0.78 for an action the previous year.

Revenues of division of Windows made $5.88 billion that is 24% more, than in the same period of last year. The division of server products which is responsible for sales of Windows Server products and Microsoft System Center showed growth of revenue by 9% to $5.19 billion. At the same time sales of System Center grew by 18%, and SQL Server – for 16% respectively.

Business division which is responsible for sales of a packet of Microsoft Office earned $5.69 billion in the specified financial quarter that is 10% less in annual comparison. Revenue from sales of server software, including Lync, Microsoft SharePoint and Microsoft Exchange showed "the two-digit growth".

The division of devices and entertaining services which is engaged, in particular, in production Xbox helped out 11% less in annual comparison, only $3.77 billion. It is interesting that the business connected with Skype which also enters this division showed to 59% growth, but not money, and in minutes of a talk. The division of online services increased revenue by 11% to $869 million.

Addressing analysts, the chief financial officer of corporation Peter Klein called results "solid". He also added that market situation favors to Microsoft in connection with a release of Windows 8 and also the forthcoming release of Microsoft Office 2013 and the Surface Pro tablet. At the moment Microsoft implemented already more than 60 million copies of Windows 8.

2011: 2nd quarter of financial year: revenue of +5% to $20.8 billion

Microsoft announced results of the second financial quarter which came to the end on December 31, 2011: revenue of the company made $20.89 billion, what is 5% higher, considering $224 million the deferred revenues connected with program implementation of a technology guarantee of Office 2010. Net profit reached $6.62 billion or $0.78 for an action, in comparison with $6.63 billion, or $0.77 for an action.

The chief executive of the company Steve Ballmer considered result "solid", and in the statement foretold that in the new financial year beginning in July, business development will accelerate. The reason of so optimistic view – start of the products and services preparing for an exit.

Microsoft did not reach digit of income in $20.93 billion predicted by consensus of the analysts polled by Thomson Reuters, but exceeded the forecast of an expected profit for an action in $0.76.

The division of Business Division company generated $6.28 billion income that is 3% higher year on year. For 7% - excepting deferred revenues from Office 2010. It is said in the statement of the company that from the moment of its start, 18 months ago, was sold to nearly 200 million licenses. Income from Exchange and SharePoint grew by 10% while income from Lync and Dynamics CRM grew more than by 30%.

The division of Server & Tools could gain $4.77 billion, it is 11% higher. It was helped by "the two-digit growth of revenue" from sales of premium releases Windows Server and SQL Server and also more than 20% revenue growth from implementation System Center.

The division of Windows and Windows Live showed reduction of income for 6% to value of $4.74 billion. Since launch of Windows 7 more than 525 million licenses were sold.

Income from activity of the Online Services group grew by 10% and was $784 million, and the division of Entertainment & Devices provided income in $4.24 billion, it is 15% higher than a previous period. Now at the market there are about 66 million Xbox 360 consoles and also 18 million Kinect devices. The number of associates of Xbox Live increased by 33% and reached 40 million.

Reviewing the operating expenses, Microsoft assumes their decrease in the range of $28.5 billion up to $28.9 billion for the whole year, coming to the end on June 30. Though concerning sales of personal computers analysts expect one more weak quarter, according to them, further within a year of sale should get stronger.

Remains not clear whether Microsoft will be able to achieve results from a number of new products: Windows Phone Windows 8 and Office 365. According to the analyst of Edward Jones Josh Olson, for Microsoft it is year of product lifecycle. "That, how successfully the company will offer the products, a lot of things will tell about a year in general", - he noted.

2010: Growth of revenue to $62 billion

According to the results of 2009-2010 financial years revenue of corporation grew by 7% to $62.48 billion, profit — for 29% to $18.76 billion:

  • Revenue of division of Windows & Windows Live made $18.49 billion against $14.97 billion the previous year,
  • Server & Tools — $14.87 billion against $14.19 billion,
  • Online Services — $2.20 billion against $2.12 billion,
  • Business Division — $18.64 billion against $18.91 billion,
  • Entertainment & Devices — $8.06 billion in comparison with $8.04 billion in 2008-2009 financial year.

Financial performance of Microsoft in comparison with competitors

2009: Recession of revenue for 3% to $58 billion

Revenue of the company in 2008-2009 financial year made $58.44 billion that is 3% less than a last year's indicator ($60.42 billion). Net profit was reduced by 18% to $14.57 billion against $17.68 billion a year ago. The net profit per share made $1.62 that there is 13% less last year. Since 1986 when shares of the company were placed on the exchange, it is the first case of reduction of annual revenues. The chief financial executive of Microsoft Chris Liddell explains the received results with bad demand for personal computers. Besides, among buyers netbooks which are on sale from the preset Windows XP, not the most profitable product for Microsoft have the greatest popularity.

According to the results of ended financial year revenue increased only at server division — by 7.3% to $14.13 billion. Revenue of client division was reduced by 13% to $14.71 billion, business divisions — for 0.2% to $18.89 billion, game — for 5.6% to $7.75 billion, online — for 3.7% to $3.09 billion.

After the publication of the report of a stock of Microsoft in the period of an expanded trade series fell up to $23.56 in price for 7.8% or $2. Before the publication of an action grew by 3.1% up to $25.56. During the remained period of the current calendar year the company does not wait for improvements as its revenue directly depends on sales of computers, and they, according to forecasts of analysts, will have to be reduced for the first time in 8 years. Gartner predicts decrease in world sales by 5% year-on-year.

2007: Sales volume is $51 billion

The sales volume of Microsoft corporation in 2006-2007 financial year grew by 15% and was $51.10 billion. Net profit was $14.10 billion, the core income reached a point of $18.50 billion.

$7.1 billion were invested in the direction of research and development (Research and Development).

See Also