FY11 Q2 - Performance - Investor Relations - Microsoft

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Earnings Release FY11 Q2

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Performance

Customer response to innovation led to strong financial results

  • Record revenue and EPS
  • Double-digit revenue and EPS growth*
  • Bookings growth of 21%
  • Introduced Kinect sensor and sold 8 million units
  • Office 2010 launch momentum continues
  • Another quarter of operating margin expansion
*Adjusted for fiscal 2010 deferred revenue relating to Windows 7 tech guarantee and pre-sales ("Windows 7 deferred revenue recognition")

Revenue increased primarily due to strong sales of the Xbox 360 console and accessories, including Kinect, the 2010 Microsoft Office system, and Server and Tools products. This increase was offset in part by the recognition in the prior year of approximately $1.7 billion of revenue related to the Windows 7 Deferral. Changes in foreign currency exchange rates had an insignificant impact on revenue.

Operating income decreased reflecting higher operating expenses, offset in part by the change in revenue. Key changes in operating expenses were:

• Cost of revenue increased $1.2 billion or 33%, primarily reflecting increased volumes of Xbox 360 consoles and accessories sold and higher costs associated with our online offerings.

• General and administrative expenses decreased $238 million or 20%, due mainly to a decrease in legal charges and employee severance, offset in part by higher headcount-related expenses.

• Sales and marketing expenses increased $206 million or 6%, primarily reflecting increased advertising and marketing of the Xbox 360 platform, Windows Phone, and Windows and Windows Live.

• Research and development expenses increased $106 million or 5%, due mainly to higher headcount-related expenses.

IMPORTANT NOTICE TO USERS (summary only, click here  for full text of notice); All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. We do not endorse third-party information. All information speaks as of the last fiscal quarter or year for which we have filed a Form 10-K or 10-Q, or for historical information the date or period expressly indicated in or with such information. We undertake no duty to update the information. Forward-looking statements are subject to risks and uncertainties described in our  Forms 10-Q and 10-K.

Download Earnings Related Files

FY11 Earnings Release Schedule

  • Q3-Thursday, April 28
  • Q4-Thursday, July 21

Microsoft Corp (MSFT)

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