Microsoft Profit Takes A Slight Hit From Purchase Delays
October 19, 2012

Microsoft Profits Dip As Customers Hold Out For Windows 8

redOrbit Staff & Wire Reports - Your Universe Online

Microsoft Corp. reported its fiscal first-quarter financial results on Thursday, posting an 8 percent drop in revenue due to shrinking PC sales as consumers delayed new purchases or turned to lower-cost tablet devices amid a sluggish economy.

The software giant said it had earned $0.55 per share on revenue of $16.01 billion for the quarter ending September 30, narrowly missing analysts´ estimates of $0.56 per share and $16.45 billion in revenue.

"While enterprise revenue continued to grow and we managed our expenses, the slowdown in PC demand ahead of the Windows 8 launch resulted in a decline in operating income,” said Microsoft chief financial officer Peter Klein.

Part of Microsoft´s dip in quarterly sales was due to the deferral of some revenue ahead of the upcoming releases of new Windows and Office products. The company is allowing recent buyers of its operating system and office software to upgrade their products when Windows 8 launches on October 26, and accounting rules mandate a delay in recognizing some revenue on these purchases.

“These financial results reflect the deferral of $1.36 billion of revenue and $0.13 of diluted earnings per share, due to the Windows Upgrade Offer, pre-sales of Windows 8 to OEMs prior to general availability, and the Office Offer,” Microsoft said in a statement.

Microsoft is hoping the launch next week of its new Windows 8 operating system will help reinvigorate PC sales.

“The launch of Windows 8 is the beginning of a new era at Microsoft,” said chief executive Steve Ballmer.

“Investments we´ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners.”

“We´re incredibly excited to be approaching general availability of Windows 8 and Windows RT,” said Kevin Turner, Microsoft chief operating officer.

“We´ve already certified more than 1,000 systems for Windows 8 from our hardware partners, ranging from the smallest tablets and convertibles to touch-enabled ultrabooks and all-in-ones to the most powerful desktop computers.”

Microsoft´s latest financial report follows the company´s first-ever quarterly loss in the prior quarter, which was the result of a one-time charge related to a failed acquisition of aQuantive in 2007.