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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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About Vista:
By gochichi on 11/11/2007 9:01:07 PM , Rating: 1
I think they are doing masterful planning with Vista. They are running a super tight ship when it comes to money making. I think the price of Vista is appropriate and coming down with some incentives at times ($50-$75 gift certificates) and such. It promotes hardware sales.

I also think that the Apple surge is only guaranteed to make Microsoft even more money. Apple has done the impossible: It has taken computers out of the $500 price range gutter. Apples run Windows, and Microsoft Office. When MS Office 2008 for Mac comes out, they are going to be swooshing in even more money. Basically, MS is still at the forefront of proprietary software, any proprietary system (and certainly a Mac) will run to MS for software.

I think it's very clever, I also think it's very clever to bundle Media Center capabilities as this one of the only areas where I can say my computer today allows me to do something that my old computer didn't. Certainly, recording and playing HD video on Media Center is something that I can't help but see "Microsoft" on. Just like MP3 player you think Apple.

I think it makes a whole lot of sense for Microsoft to keep their release cycles to every 5 years or less... but this is Microsoft, they really don't make a whole lot of mistakes. They don't innovate but they market with precision. And they let hardware vendors help them out. (Thinking NVIDIA, ATI, and INTEL).




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