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January 27, 2010

Microsoft Q2 revenue up 14% to $19.02bn

Demand for Windows 7 led to positive top-line growth

By CBR Staff Writer

Microsoft has reported revenue of $19.02bn in the second quarter ended December 31, 2009, an increase of 14%, compared to $16.63bn in the same period last year.

The company posted an operating income of $8.51bn, up43% compared to $5.94bn in the same period last year. For the quarter ended December 31, 2009, the company posted a net income of $6.66bn, up 60% compared to $4.17bn in the same period a year ago. Diluted earnings per share increased 57% to $0.74.

The results reflect the deferral of $1.71bn of revenue, an impact of $0.14 of diluted earnings per share, relating to the Windows 7 upgrade option program and pre-sales of Windows 7 to OEMs and retailers before general availability. Adding back the deferred revenue, revenue totalled $17.31bn, and earnings per share totaled $0.60 per share.

Revenue from Windows & Windows Live division increased to $6.9bn from $4.06bn, while revenue from Server and Tools segment was $3.84bn, compared to $3.75bn in the same period last year. Microsoft Business division revenue was down to $4.75bn from $4.88bn, while Online Services division, which includes the Bing search engine, was down to $581m from $609m. Entertainment and Devices division revenue was down to $2.9bn from $3.26bn.

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Peter Klein, chief financial officer at Microsoft, said: “Exceptional demand for Windows 7 led to the positive top-line growth for the company. Our continuing commitment to managing costs allowed us to drive earnings performance ahead of the revenue growth.”

Kevin Turner, chief operating officer at Microsoft, said: “This is a record quarter for Windows units. We are thrilled by the consumer reception to Windows 7 and by business enthusiasm to adopt Windows 7.”

The company offers operating expense guidance of $26.2bn to 26.5bn, for the full year ending June 30, 2010.

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