Microsoft ended its fiscal year with record revenue and stellar profit as businesses snapped out of the malaise of the economic crisis and began updating computer gear.
Microsoft on Thursday reported a US$4.52 billion profit on revenue of US$16.04 billion in its fourth quarter, which ended on June 30.
“This quarter’s record revenue reflects the breadth of our offerings and our continued product momentum,” Microsoft chief financial officer Peter Klein said.
Microsoft credited the strong sales figures in part to the successful launch of its latest-generation Office 2010 software and to continued strong demand for its new Windows 7 operating system.
The popularity of its Xbox 360 videogame consoles and Bing’s improving share of the Internet search market also contributed to the successful final quarter of its fiscal year.
“We saw strong sales execution across all of our businesses, particularly in the enterprise with Windows 7 and Office 2010,” chief operating officer Kevin Turner said. “We look forward to continuing our product momentum this fall with the upcoming launches of Windows Phone 7 and Xbox Kinect.”
Kinect is an Xbox 360 accessory that lets people use natural gestures or body movements to command on-screen action.
Microsoft said it finished the fiscal year with record-high revenue of US$62.48 billion and profit of US$18.76 billion, or US$2.10 per share.
“It’s been a great fiscal year and an outstanding fourth quarter,” Klein said.
He added that Microsoft was encouraged by the resurgence of computer purchases by businesses that had shunned upgrading technology while riding out the global financial chaos.
The Microsoft division handling business products had record revenue in the final fiscal quarter and the “resurgence of the refresh cycle” was expected to continue through the coming year.
Windows 7 has become the fastest-selling operating system and is already running more than 15 percent of personal computers worldwide, according to Klein.
Microsoft said that emerging markets, such as China, where the company makes less money off its products were the “significant drivers” of the PC market.
Bing has gained market share for 13 consecutive months, earning over 4 percent since its launch in June last year, according to Microsoft executives. Online advertising revenue grew 19 percent during the recently ended quarter.
Klein assured analysts that Microsoft will continue to keep a lid on costs, signaling that the company is treading cautiously when it comes to the global technology market’s revival.
“Business spending has picked up,” said analyst Matt Rosoff of private firm Directions On Microsoft, which tracks the Redmond, Washington-based technology colossus.
“Microsoft is back to being the steady, profitable company everybody knew a couple of years ago,” the analyst said.
Microsoft killed its freshly launched line of Kin smartphones on the last day of the fiscal year, pushing about US$200 million of loss into this year.
“That isn’t a whole lot of money in Microsoft terms, but it is sort of a debacle if you look at it on its own,” Rosoff said of Kin’s demise. “It is good they got that failure behind them.”
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