Microsoft Q4: Higher Sales, Lower Earnings

By Staff On Feb 12 2007 - 8:00am

Microsoft reported record revenue of $12.5 billion for the quarter, ended Dec. 31, 2006, a 6 percent increase from $11.8 billion over the same period of the prior year, even though Windows Vista and 2007 Microsoft Office introductions were delayed until this quarter.

Operating income for the quarter was $3.47 billion, down from $4.65 billion for the same quarter last year, and net income was $2.63 billion, down from $3.65 billion in the prior year.

Microsoft said these results reflect the deferral of $1.64 billion of revenue and operating income and $1.13 billion of net income due primarily to the technology guarantee programs that were announced Oct. 24, 2006, for Windows Vista and the 2007 Microsoft Office release.

Microsoft said revenue growth over the same period of the prior year would have been 14 percentage points higher before the technology guarantee programs.

"Results this quarter exceeded our expectations across the board, with revenue growth at or above our high-end guidance for all divisions," said Chris Liddell, chief financial officer at Microsoft. "Healthy PC and server markets as well as broad-based business and consumer demand for Microsoft offerings fueled revenue growth this quarter."