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Microsoft Posts Higher Sales, Net Income

Redmond, Wash. – Microsoft reported record fiscal
third-quarter revenues and higher net income, due in part to the acceptance of
the Windows 7 operating system.

Revenues for the quarter, ended March 31, were $14.5 billion, a 6
percent increase from the same period last year. 

Operating income was $5.17 billion, up 17 percent, and net income
was up 35 percent to $4.01 billion from the prior year’s third quarter.

The results include the deferral of $305 million of revenue
relating to the Microsoft Office 2010 Technology Guarantee program. Adjusting
for the revenue deferral, third-quarter revenue totaled $14.81 billion, an
increase of 8 percent over the prior-year period.

“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,” said Peter Klein, chief financial officer at Microsoft. “Our record
third-quarter revenue, along with continued rigor on cost management, resulted
in exceptional EPS growth.”

Windows revenue was up 28 percent, compared with the same quarter
a year earlier, driven by strong demand for Windows 7. More than 10 percent of
all PCs worldwide are running Windows 7 today, making Windows 7 by far the
fastest-selling operating system in history, the company said.

customers are beginning to refresh their desktops and the momentum of Windows 7
continues to be strong,” said Kevin Turner, COO. “We are also seeing
tremendous interest in our market-leading cloud services for business.”