Microsoft revealed that its quarterly results fell short of analysts' predictions mainly because of the dip in personal computer sales and due to its deferral of revenue for the upcoming product launches.
The software giant reported a 22 percent decline in its fiscal first-quarter revenue as it is understood that the sales were largely affected as the costumers and businesses halted new purchases waiting for the release of the Windows 8 operating system. Microsoft reported $4.47 billion in net income for its first fiscal quarter of 2013. The quarter ended on Sept. 30 registered a revenue of $16.01 billion which is an 8 percent decline from the last year.
"These financial results reflect the deferral of $1.36 billion of revenue and $0.13 of diluted earnings per share, due to the Windows Upgrade Offer, pre-sales of Windows 8 to OEMs prior to general availability, and the Office Offer," Microsoft said in a statement. "The launch of Windows 8 is the beginning of a new era at Microsoft," said Steve Ballmer, chief executive officer at Microsoft. "Investments we've made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners."
The earnings fell well short of the analysts' forecasts as they had expected Microsoft to register a revenue of $16.42 billion and earnings per share of 56 cents for the quarter ended Sept. 30.
The company's main business focus the Server & Tools business reported $4.55 billion in first-quarter revenue, an 8 percent increase from the prior year period. The performance was drive by a double-digit revenue growth in SQL Server and more than 20 percent growth in System Center revenue. Meanwhile, its Business Division posted $5.50 billion in first-quarter revenue, a 2 percent decrease from the prior year period.
"While enterprise revenue continued to grow and we managed our expenses, the slowdown in PC demand ahead of the Windows 8 launch resulted in a decline in operating income," said Peter Klein, chief financial officer at Microsoft. "Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and Microsoft Business Division products as businesses commit to our technology roadmap."
