Microsoft Posts Record Sales And Earnings Despite Slack Windows Sales

Steve Ballmer punching

Photo: AP

Microsoft just posted earnings for the last quarter of 2011, and everything was right on target.Earnings per share came in at $0.78 while revenue was $20.89 billion.

Analysts were expecting $0.76 and 20.93 billion, on average.

Apparently a lot of people were expecting a miss — shares are up almost 3% after hours. Investors may also be happy that Microsoft lowered its full year operating expense estimates by a couple hundred million dollars.

Or maybe they’re just pulling money out of Google, which just blew its Q4.

Still, Windows revenues were pretty light — only $4.74 billion, down about 6% from last year’s quarter. That’s a big drop. Microsoft had previously warned that it expected a big drop in PC sales from last year because of component shortages caused by flooding in Thailand. The effects of the floods will last through next quater.

Revenue growth came mostly from infrastructure software (Server & Tools, up 11%) and Xbox, which had a monster quarter (the Entertainment & Devices division housing Xbox was up 15%).

For more details, see below for our minute-by-minute coverage of the company’s earnings call.

Here’s a detailed rundown of revenue and earnings versus expectations:

  • Revenue: $20.89 billion vs $20.93 expected.
  • EPS: $0.78 vs $0.76 expected
  • Net income: $6.62 billion
  • Windows revenue: $4.74 billion vs $4.95 billion
  • Business Division (mostly Office) revenue: $6.28 billion vs $6.10 billion
  • Server & Tools (infrastructure software) revenue: $4.77 billion vs $4.85 billion
  • Entertainment & Devices (Xbox, mobile) revenue: $4.24 billion vs $4.40 billion
  • Online (Bing, MSN) revenue: $784 million vs $795 million

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