On Thursday, Microsoft announced operating income of $7 billion on record revenue of $16.2 billion for the quarter ending September 30. The results were dramatically better than expectations and up significantly from the same time period a year ago. Indeed, the company experienced double-digit sales and income growth. Net income jumped a whopping 51 percent.
Microsoft also reported that all its business units experienced growth in the quarter, at least temporarily silencing critics who have latched onto a nonsensical thread in recent days about the software giant's supposedly dying business.
"This was an exceptional quarter, combining solid enterprise growth and continued strong consumer demand for Office 2010, Windows 7, and Xbox 360 consoles and games," said Microsoft Chief Financial Officer Peter Klein. "Our ability to grow revenue while continuing to control costs allowed us to deliver another quarter of year-over-year margin expansion."
The Xbox 360 experienced a torrid quarter, with console sales rising 38 percent, thanks largely to a hardware refresh and the new Halo: Reach game. Office sales jumped 15 percent, thanks to the Office 2010 release. A "continued healthy and sustaining business PC refresh cycle" drove Windows 7 sales to an average of more than 20 million licenses per month, and even Bing was cited for its continued market-share growth in the quarter.
The message from Microsoft was simple: All that bad news you've been reading from tech pundits is just uninformed. "We are seeing improved business demand and adoption," Microsoft Chief Operating Officer Kevin Turner said. "Our enterprise agreement rates were strong, reflecting business commitment to Windows 7, Office 2010, and our server and database products. Customer demand and excitement for our cloud and commercial online services continue to grow as demonstrated by major new customer wins this quarter for Windows Azure and by the significant customer interest in our recently announcedservice."
Microsoft started the day with a lengthy keynote address at its PDC10 trade show, being held this year on the company's corporate campus in Redmond, Washington. During the address, Microsoft CEO Steve Ballmer touted the strength of products such as Windows 7, Windows Phone 7, and Internet Explorer (IE) 9, at one point proudly exclaiming, "When it comes to Windows Phone, make no mistake, we're all in. BOOM, BABY!"