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Microsoft credits Vista and Halo 3 for strong fiscal Q1 2008 performance
Microsoft sees its fastest Q1 since 1999

We've heard from three major tech companies regarding third quarter performance over the past two weeks. Intel and Apple were both up, while AMD reported its third straight quarter of losses.

Today, it's Microsoft's turn and its results for fiscal Q1 2008 were quite impressive. The Redmond, Washington-based company recorded operating income of $5.92 billion USD and net income of $4.2 billion USD on revenues of $13.76 billion USD. Microsoft's revenue for Q1 represented a 27 percent increase from fiscal Q1 2007 and marks its best fiscal Q1 performance since 1999.

"This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999," said Microsoft CFO Chris Liddell. "Operating income growth of over 30% also reflects our ability to translate revenue into profits while making strategic investments for the future."

Not surprisingly, Microsoft also attributed a good portion of its growth to the success of Windows Vista which launched in late November 2006 for OEMs and late January 2007 for consumers.

"Customer demand for Windows Vista this quarter continued to build with double-digit growth in multi-year agreements by businesses and with the vast majority of consumers purchasing premium editions," said Kevin Johnson, remarked Microsoft Platform and Services Division at Microsoft President Kevin Johnson.

On a division-specific basis, Microsoft's Client, Server and Tools, Business, Online Service and Entertainment and Devices divisions reported Q1 2008 revenue growth of 25 percent, 16 percent, 20 percent, 25 percent and 91 percent respectively compared to fiscal Q1 2007.

The big jump in the Entertainment and Devices division can be attributed to none other than Halo 3. Halo 3 generated $170 million USD within a 24-hour period and raked in over $300 million USD during its opening week.

The release of Halo 3 also allowed Microsoft's Xbox 360 to outsell Nintendo's Wii console for the first time during the month of September. The company managed to move 527,000 Xbox 360s during September compared to 501,000 Wiis. This marks a dramatic improvement from the Xbox 360's August numbers of 276,000 units -- itself a big jump from July's tally of 170,000 units.

Halo 3's release was so profound that Hollywood blamed that lackluster box office debut of The Heartbreak Kid on Master Chief's third adventure.

Halo 3's financial impact was also enough to lift Microsoft's Entertainment and Devices division from a loss of $142 million USD during fiscal Q1 2007 to a $165 million USD profit.

Thanks to Microsoft's strong fiscal Q1 2008 performance, it's raising its outlook for fiscal 2008 performance. Its revenue forecasts are being adjusted from the $57.3 billion USD to $59.2 billion USD range. Operating income forecasts are also being raised to $23.5 billion USD from $22.45 billion USD.

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Customer Demand?
By yost007 on 10/26/2007 10:53:48 AM , Rating: 3
More like sales of pc's must be doing well. In most cases you only have one choice of operating system. I bought a new laptop 3 weeks ago. Vista of course in installed. It is fine and all but what a resource hog. Oh and then I found out that if I installed XP on it it would void my warranty.

This thing has a C2 Duo T7200 w/2 GB's ram and runs Corel X at the same speed as my 3 year old 3.2 P4 with 1 GB ram.

But my biggest gripe with Vista . That damn dialog box that pops up saying "You have blocked startup programs", Ugh.

Anyways congrats to Microsoft for finally making a profit in their entertainment division.

RE: Customer Demand?
By Ringold on 10/26/2007 8:50:52 PM , Rating: 2
I fixed that... but not sure how. All that did it to me was BOINC, and I believe installing it as a service did the trick, but can't recall now.

As for performance, eh, I don't buy that. It should easily outbenchmark the old power-hog. A X2 3800+ 2GB box I put Vista on saw only gaming performance degradation -- and if I bothered to stick on 7.10's that might fix it, but too lazy. Vista gives up a lot of the RAM it caches when apps desire it and it's background processes eat virtually no CPU time -- like every other OS.

"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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