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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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RE: Customer Demand?
By SavagePotato on 10/29/2007 9:39:42 AM , Rating: 2
Yes I realy think Microsoft has completely fabricated their financial results for the quarter. Since im pretty sure that would constitute fraud I can totaly see why they would just make up some number to make Vista look better.

Or maybe you are talking nonsense and haven't got a clue.

Take your pick on which is more likely.

The reason companies like dell started offering XP again is indeed due to consumer demand, but it has nothing to do with being smart. It has everything to do with being afraid of change and buying into false press.

I'm not sure where you work but I work for a very small isp and also do computer repair, and I see tons of vista systems, in a fairly small population center I might add.

Funny story, there was a customer that purchased a toshiba laptop a couple months back. He came back just livid about vista, claiming it was the most horrible thing ever. I forwarded him to the sales manager and sugguested he exhange for an XP laptop if he wasn't happy and never gave it another thought. The other day the guy came back in for something and turns out he ended up keeping vista, his response was now that he's spent some time with it he realised it is in fact quite good, and loves the Vista system.

That situation is what 99% of Vista dislike situations boil down to. "It's different and I feel stupid cause I don't know how to use it so XP is better, beacause I know how to use it and that makes me feel intelligent". People do not like having their lack of knowlege exposed changing things around tends to do that, and that makes them upset.


"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner

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