Microsoft beats Q3 2011 earnings estimates thanks to Xbox and Office

By Tom Warren, on 28th Apr 11 9:05 pm with 14 Comments

Microsoft stock

Microsoft announced on Thursday, a record third-quarter revenue of $16.43 billion for the quarter ended March 31, 2011.

Analysts were expecting Microsoft to post earnings of 56 cents per share however the software giant breezed past the estimates to report earnings of 61 cents per share. “We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses,” said Peter Klein, chief financial officer at Microsoft. “Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications.”

Microsoft managed to secure $5.23 billion net income in Q3, 2011. This figure is less than Apple’s equivalent and means that Microsoft is now less profitable. Apple recorded $5.99 billion net quarterly profit for its second quarter ended March 26, 2011.

Microsoft’s strong third-quarter earnings came after global PC shipments declined 3.2% during the first quarter of 2011, compared to the same period last year. IDC originally forecast a 1.5% growth in shipments but noted the decline recently. “A spike in fuel and commodity prices and the disruptions in Japan added to the mix, further dampening a market struggling to maintain momentum,” says IDC. Despite the lagging PC market, Microsoft’s revenue increased by 13 percent year-on-year. However, Windows sales were down 4% “inline with PC trends”.

Microsoft Business Division revenue grew 21% year-over-year. Office 2010 has become the fastest-selling version of Office in history, and the integrated innovation with SharePoint, Exchange, Lync and Dynamics CRM is driving significant growth for the division says Microsoft. Microsoft’s Entertainment & Devices Division grew 60% year-over-year, fueled by Kinect for Xbox 360, the fastest-selling consumer electronics device in history, continued strong Xbox 360 console sales and growth of Xbox Live.

Microsoft is currently trading down around 2% in after-hours NASDAQ trading. Microsoft is due to hold an earnings call at 17:30 ET, WinRumors will update this story with any items of interest.

  • David Garnett Welsh

    Great news :) I expect Microsoft to grow with these anti-trust shackles coming off and with the great products they are churning out!

  • Anonymous

    I am really looking forward to the moment when Microsoft surpasses Apple again :D The day that happens, there’s a party at my place, and you’re all invited ! ^

    • Alessandro Grua

      I will be there for sure! ;) Let’s hope also the market cap. of Microsoft will beat Apple’s soon!

    • Tom W

      Pretty hard to beat that right now, 100 billion difference :/

    • Anonymous

      Don’t you mean around 760 MILLION dollar difference.. not 100 billion heh.. MS could recover that 760 million easily if it gets cost under control with bing

    • Mark

      They’re talking about *marketcap*. Tom is correct.

    • Ash755

      well with windows phone expected to overtake ios in 2015 and with an entire new ecosystem of windows prodecuts (windows phone 8, windows 8, and some windows 8 tablet) comming, the future looks promissing and it looks like apple will fall very soon

    • Michiel Papp

      consider me on the guest list :p

    • Mark

      You’re going to be waiting a long time. MS would need a new CEO, a new strategy, several transformative acquisitions, a couple of large groups jettisoned, and then five years of execution at levels we haven’t seen from them in a decade. Oh, and Apple would have to make a lot of mistakes.

  • Judayeong
  • MSFT quite impressive

    These guys are coming guns-blazing with kick-ass products in every single market of IT industry. From systems software to productivity suites, from entertainment to virtualization, from cloud to databases and search engines. Unbelievable range of products with very high and increasing market share every damn financial quarter.

    If there is anything “undervalued”, it is MSFT.

    • Anonymous

      OMG you’re so right.

  • Shiro

    How does this compare to the earnings from Apple? Does Apple pwn Microsoft??

  • Keno Butler

    This will turn around soon and very soon…