Microsoft isn’t all about Windows: Some serious growth in its entertainment and business divisions helped spur Microsoft to a strong finish in the second quarter of its 2011 fiscal year, with revenue up 5 percent.
The earnings were released — or rather, leaked — on Microsoft’s own website, slightly ahead of schedule in a rather odd snafu for Microsoft. Investors were nonetheless pleased with the results, sending Microsoft’s shares up about 1.4 percent in regular trading. Shares were up further by about 0.5 percent to $28.90 in extended trading.
Microsoft’s revenue was for the second quarter of its 2011 fiscal year $20 billion, from $19 billion in the second quarter of its 2010 fiscal year. Its income off that revenue was down 4 percent to around $8.2 billion from $8.5 billion in the second quarter in its 2010 fiscal year. But that beat the consensus estimate of Wall Street analysts, which was around $19.14 billion.
The largest spike in growth are in Microsoft’s entertainment and business divisions. The entertainment division, which includes the Xbox 360, grew 55 percent and brought in $3.7 billion. A big chunk of that came from sales of Microsoft’s newest motion controller for the XBox 360, the Kinect, that lets players control games with their entire bodies. Income off its entertainment division almost doubled, growing from $370 million in the second quarter in 2009 to $680 million in 2010.
Microsoft sold 6.3 million XBox 360 consoles during the holiday season, and 8 millon Kinect controllers in the first 60 days after launch. Memberships of its premium XBox Live online service grew 30 percent in the second quarter of its 2011 fiscal year, according to the company. Microsoft is expecting 50 percent growth in its entertainment division in the third quarter, and 40 percent overall for its 2011 fiscal year.
Microsoft’s business division brought in $6 billion in revenue in the second quarter, up from $4.8 billion the same quarter a year earlier. Sales of its Windows services were down, with revenue dropping around 30 percent to $5 billion in the second quarter of 2010 from $7.1 billion in the second quarter of 2009. Online advertising revenue from its search site, Bing, grew 23 percent.
Windows 7 sales were responsible for bringing about record-breaking quarters for Microsoft in 2009, but have since faded a bit as many have already upgraded to the newest operating system. Income from its business division was up around 33 percent to $4 billion in the second quarter of its 2011 fiscal year, from $3 billion in its second quarter of the 2010 fiscal year. Microsoft has sold 300 million copies of Windows 7 since launch, and around a fifth of all Internet-connected PCs are running Windows 7, according to the company.
Most of the talk has been about whether Microsoft would bring in less quarterly income than Apple, which has since blown by the Windows developer in value on the stock market. While bringing in less revenue (Apple took in around $26.7 billion), Microsoft generated more income — Apple only made about $6 billion in its most recent quarter.