Microsoft to Wall Street: Analyze This

Microsoft reported earnings for the first quarter of the company’s fiscal 2011 this afternoon, and they were record-breaking despite the pessimism of analysts who have been downgrading its stock lately.

Earnings per share were 62 cents on revenue of $16.2 billion, better than the 55 cents per share on $15.8 billion in revenue that analysts had been expecting. Net income spiked from $3.57 billion in the same quarter a year ago to $5.41 billion in the current one, bolstered by strong sales of Windows 7 and Office 2010. And pretty much all of the company’s divisions showed significant growth.

• Revenue at Microsoft’s Windows division rose to $4.8 billion from $2.9 billion, with a profit of $3.3 billion.
• Revenue at the company’s business unit, which includes Microsoft Office, rose to $5.1 billion from $4.5 billion. Profit was $3.4 billion.
• Revenue at its Entertainment and Devices Division rose to $1.7 billion from $1.5 billion. Profit was $382 million.
• Finally, revenue at Microsoft’s money-losing online services division rose to $527 million from $487 million, though it did post a wider loss of $560 million.

“This was an exceptional quarter, combining solid enterprise growth and continued strong consumer demand for Office 2010, Windows 7 and Xbox 360 consoles and games,” Microsoft CFO Peter Klein said in a statement. “Our ability to grow revenue while continuing to control costs allowed us to deliver another quarter of year-over-year margin expansion.”