Microsoft Also Misses On $19.9 Billion In Quarterly Revenue

microsoft icon 2012A little while ago, Google disappointed investors by missing bullish revenue estimates. Microsoft also did so when it reported fiscal quarter and full-year earnings today.

Redmond’s overall revenue for the quarter was a massive $19.9 billion. Yet analysts had anticipated just under a billion more. Net income was $6.07 billion. The company also took a whopping $900 million charge associated with disappointing Surface RT sales — and related pricing adjustments.

The company’s quarterly revenues were clearly affected by “by the decline in the PC market,” said Microsoft CFO Amy Hood.

MSFT Q3 Fiscal revenues

Windows 8 has so far seen only tepid adoption. According to Chitika only 5 percent of Windows-related traffic is coming from PCs running Windows 8. Microsoft hopes that 8.1 will rehabilitate the system’s reputation and drive more consumer and enterprise PC sales.

Below are the major highlights of the earnings release today:

  • Windows division — $4.6 billion in revenue, down 15 percent due to weak consumer PC demand and Surface RT adjustments
  • Server & tools — $5 billion up 9 percent on enterprise demand strength
  • Business division (Office) — $6.1 billion, up 7 percent though consumer revenue was down 27 percent
  • Online services (Bing + ads) — $0.83 billion, with online advertising up 11 percent
  • Entertainment & devices (Windows Phone, XBox, Skype) — $2.15 billion down from $3.8 billion the previous quarter

These business units are being reorganized into a new Microsoft organization, which includes the units below. The following is verbatim from the recent Steve Ballmer memo:

  • Operating Systems Engineering Group. Terry Myerson will lead this group, and it will span all our OS work for console, to mobile device, to PC, to back-end systems. The core cloud services for the operating system will be in this group.
  • Devices and Studios Engineering Group. Julie Larson-Green will lead this group and will have all hardware development and supply chain from the smallest to the largest devices we build. Julie will also take responsibility for our studios experiences including all games, music, video and other entertainment.
  • Applications and Services Engineering Group. Qi Lu will lead broad applications and services core technologies in productivity, communication, search and other information categories.
  • Cloud and Enterprise Engineering Group. Satya Nadella will lead development of our back-end technologies like datacenter, database and our specific technologies for enterprise IT scenarios and development tools. He will lead datacenter development, construction and operation.

Microsoft’s two largest revenue sources have historically been Windows OS and Office. But of those products are under pressure from the decline in consumer PC sales. And with the exceptions of Servers & Tools and the Business Division, projected revenues for next quarter are somewhat lower than this quarter.

Related Topics: Channel: Industry | Microsoft | Microsoft: Bing | Microsoft: Business Issues | Microsoft: Mobile | Microsoft: Surface | Microsoft: Windows Phone

Sponsored


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



Marketing Day:

Get the top marketing stories daily!  

Share

Other ways to share:
 

Read before commenting! We welcome constructive comments and allow any that meet our common sense criteria. This means being respectful and polite to others. It means providing helpful information that contributes to a story or discussion. It means leaving links only that substantially add further to a discussion. Comments using foul language, being disrespectful to others or otherwise violating what we believe are common sense standards of discussion will be deleted. You can read more about our comments policy here.

Comments are closed.

Get Our News, Everywhere!

Daily Email:

Follow Marketing Land on Twitter @marketingland Like Marketing Land on Facebook Follow Marketing Land on Google+ Subscribe to Our Feed! Join our LinkedIn Group Check out our Tumblr! See us on Pinterest

 
 

Click to watch SMX conference video

Join us at one of our SMX or MarTech events:

United States

Europe

Australia & China

Learn more about: SMX | MarTech


Free Daily Marketing News!

Marketing Day is a once-per-day newsletter update - sign up below and get the news delivered to you!