Microsoft Reports Third Quarter Sales Hike

Microsoft last week reported an impressive 35 per cent increase in net income for its third quarter ending March 31, 2010. Overall, revenue saw a jump of 6 per cent since the same period last year, and most analysts are pointing to Windows 7 as the cause.

Released on October 22, 2009, Windows 7, Microsoft's latest (and, critically, greatest) operating system (OS) has fueled a remarkable rise in the Redmond-based firm's popularity and profitability. According to reports, sales in Microsoft's Windows unit were up 28 per cent, to $4.4 billion. That's good news for a department that desperately needed a boost after the Vista debacle in 2007.

Xbox, Bing Help MS to Record Revenue

Still, Microsoft's portfolio as a whole showed impressive results. "Windows 7 continues to be a growth engine, but we also saw strong growth in other areas like Bing search, Xbox Live and our emerging cloud services," noted Microsoft CFO Peter Klein. (Source: informationweek.com)

Indeed, Microsoft's video game division did very well for itself. The company's Entertainment & Devices group, which is responsible for Windows-based games and the Xbox and Xbox 360, saw sales go up 2.2 per cent to $1.7 billion. Also hitting its stride was Microsoft's Online Services unit, which shot up 12 per cent to $566 million.

Consumers Wait for Office 2010

Holding things back was Microsoft Office, which saw sales decline about 6 per cent to $4.2 billion. Analysts believe many business users opted to hold back on purchasing the software suite with a whole new edition of Office due in 2010. The upcoming version will boast free access to web-based editions of programs like Excel, Word, PowerPoint and OneNote.

Surprisingly, some analysts had actually predicted more significant growth for Microsoft. The 6.3 per cent hike in revenue to $14.5 billion was slightly lower than estimates of $14.8 billion. (Source: businessweek.com)

Still, Microsoft's numbers are most certainly impressive and come just a week after Intel reported its own surge in profits. The reason? Some believe companies are starting to update their aging systems with new ones, and in doing so they're buying Intel chips and Microsoft Windows 7 PCs.