Browse Earnings Releases

Browse Earnings Releases

Fiscal Year:
Quarter:
Stock InformationMicrosoft Corp (MSFT)
Stock InformationMicrosoft Corp (MSFT)
Browse Earnings Releases

Browse Earnings Releases

Fiscal Year:
Quarter:

Earnings Release FY13 Q2

Microsoft Reports Record Revenue of $21.5 Billion in Second Quarter

Strong business demand and key product launches drive record revenue.

 

REDMOND, Wash. — Jan. 24, 2013 — Microsoft Corp. today announced quarterly revenue of $21.46 billion for the quarter ended December 31, 2012. Operating income, net income, and diluted earnings per share for the quarter were $7.77 billion, $6.38 billion, and $0.76 per share.

These financial results reflect the net deferral of revenue for the Windows Upgrade Offer, Office Upgrade Offer and Pre-sales, and the Entertainment and Devices Division Video Game Deferral, partially offset by the recognition of previously deferred revenue for Windows 8 Pre-sales. The following table reconciles these financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. We have provided this non-GAAP financial information to aid investors in better understanding the company’s performance.

 

Three Months Ended  December 31,

Percentage Change

(In millions, except per share amounts and percentages)

Revenue

Operating income

Diluted EPS

Revenue

Operating income

Diluted EPS

2011 As reported (GAAP)

$20,885

$7,994

$0.78

 

 

 

2012 As reported (GAAP)

$21,456

$7,771

$0.76

3%

(3)%

(3)%

Net revenue deferred for Windows Upgrade Offer, Office Upgrade Offer and Pre-sales, and Video Game Deferral

$1,329

$1,329

$0.13

      

 

 

Revenue recognized for Windows 8 Pre-sales

($783)

($783)

($0.08)

      

 

 

2012 As adjusted (non-GAAP)

$22,002

$8,317

$0.81

5%

4%

4%


“Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers,” said Steve Ballmer, chief executive officer at Microsoft. “With new Windows devices, including Surface Pro, and the new Office on the horizon, we’ll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need.”

The Windows Division posted revenue of $5.88 billion, a 24% increase from the prior year period. Adjusting for the net deferral of revenue for the Windows Upgrade Offer and the recognition of the previously deferred revenue from Windows 8 Pre-sales, Windows Division non-GAAP revenue increased 11% for the second quarter. Microsoft has sold over 60 million Windows 8 licenses to date.

"We saw strong growth in our enterprise business driven by multi-year commitments to the Microsoft platform, which positions us well for long-term growth,” said Peter Klein, chief financial officer at Microsoft. “Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and the Microsoft Business Division.”

The Server & Tools business reported $5.19 billion of revenue, a 9% increase from the prior year period, driven by double-digit percentage revenue growth in SQL Server and System Center.

“We see strong momentum in our enterprise business. With the launch of SQL Server 2012 and Windows Server 2012, we continue to see healthy growth in our data platform and infrastructure businesses and win share from our competitors,” said Kevin Turner, chief operating officer at Microsoft. “With the coming launch of the new Office, we will provide a cloud-enabled suite of products that will deliver unparalleled productivity and flexibility.”

The Microsoft Business Division posted $5.69 billion of revenue, a 10% decrease from the prior year period. Adjusting for the impact of the Office Upgrade Offer and Pre-sales, Microsoft Business Division non-GAAP revenue increased 3% for the second quarter. Revenue from Microsoft’s productivity server offerings – collectively including Lync, SharePoint, and Exchange – continued double-digit percentage growth.

The Online Services Division reported revenue of $869 million, an 11% increase from the prior year period. Online advertising revenue grew 15% driven by an increase in revenue per search.

The Entertainment and Devices Division posted revenue of $3.77 billion, a decrease of 11% from the prior year period. Adjusting for the Video Game Deferral, the division’s non-GAAP revenue decreased 2% for the second quarter. Xbox continues to be the top-selling console in the United States. During the quarter, Microsoft launched Windows Phone 8 with a broad array of carriers and devices.

Business Outlook

Microsoft reaffirms fiscal year 2013 operating expense guidance of $30.3 billion to $30.9 billion.

Webcast Details

Peter Klein, chief financial officer, Frank Brod, chief accounting officer, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PST (5:30 p.m. EST) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor . The webcast will be available for replay through the close of business on Jan. 24, 2014.

Adjusted Financial Results and Non-GAAP Measures

For second quarter fiscal year 2013 GAAP revenue, operating income, and earnings per share growth included the net deferral of revenue for the Windows Upgrade Offer, the Office Upgrade Offer and Pre-sales, and the Entertainment and Devices Division Video Game Deferral, and the recognition of previously deferred revenue for Windows 8 Pre-sales. These items are defined in our Form 10-Q for the quarterly period ended December 31, 2012. In addition to these financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information to aid investors in better understanding the company’s performance. Presenting these measures without the impact of these items gives additional insight into operational performance and helps clarify trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance. These non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Non-GAAP Reconciliations

Windows Division

(In millions, except percentages)

Three Months Ended

December 31,

Percentage Change

2011 As reported revenue (GAAP)

$4,741

 

2012 As reported revenue (GAAP)

$5,881

24%

Net revenue deferred for Windows Upgrade Offer

$161

 

Revenue recognized for Windows 8 Pre-sales

($783)

 

2012 As adjusted revenue (non-GAAP)

$5,259

11%


Microsoft Business Division

(In millions, except percentages)

Three Months Ended

December 31,

Percentage Change

2011 As reported revenue (GAAP)

$6,310

 

2012 As reported revenue (GAAP)

$5,691

(10)%

Revenue deferred for Office Upgrade Offer and Pre-sales

$788

 

2012 As adjusted revenue (non-GAAP)

$6,479

3%

 

Entertainment and Devices Division

 

 

(In millions, except percentages)

Three Months Ended

December 31,

Percentage Change

2011 As reported revenue (GAAP)

$4,238

 

2012 As reported revenue (GAAP)

$3,772

(11)%

Revenue deferred for Video Game Deferral

$380

 

2012 As adjusted revenue (non-GAAP)

$4,152

(2)%


About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

·intense competition in all of Microsoft’s markets;

· execution and competitive risks from our increasing focus on devices and services;

· significant business investments that may not gain customer acceptance and produce offsetting increases in revenue;

· Microsoft’s continued ability to protect its intellectual property rights;

· claims that Microsoft has infringed the intellectual property rights of others;

· the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;

· cyber-attacks and security vulnerabilities in Microsoft products that could reduce revenue or lead to liability;

· improper disclosure of personal data that could result in liability and harm to Microsoft’s reputation;

· outages and disruptions of services provided to customers directly or through third parties if Microsoft fails to maintain an adequate operations infrastructure;

· government litigation and regulation affecting how Microsoft designs and markets its products;

·Microsoft’s ability to attract and retain talented employees;

· delays in product development and related product release schedules;

· unfavorable changes in general economic conditions, disruption of our partner networks or sales channels, or the availability of credit that affect demand for Microsoft’s products and services or the value of our investment portfolio;

·adverse results in legal disputes;

·unanticipated tax liabilities;

· quality or supply problems in Microsoft’s consumer hardware or other vertically integrated hardware and software products;

· impairment of goodwill or amortizable intangible assets causing a charge to earnings;

· exposure to increased economic and regulatory uncertainties from operating a global business;

· geopolitical conditions, natural disaster, cyber-attack or other catastrophic events disrupting Microsoft’s business; and

· acquisitions, joint ventures, and strategic alliances that adversely affect the business.

For further information regarding risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/investor .

All information in this release is as of Jan. 24, 2013. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, press only:

Rapid Response Team, Waggener Edstrom Worldwide, (503) 443-7070, rrt@waggeneredstrom.com

For more information, financial analysts and investors only:

Chris Suh, general manager, Investor Relations, (425) 706-4400

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news/ . Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. PST conference call with investors and analysts, is available at http://www.microsoft.com/investor .


MICROSOFT CORPORATION

INCOME STATEMENTS

(In millions, except per share amounts) (Unaudited)

Three Months Ended December 31,

Six Months Ended December 31,

 

2012

 

2011

 

2012

 

2011

Revenue

 $   21,456

 $20,885

 $    37,464

 $38,257

Cost of revenue

5,692

5,638

9,860

9,415

   Gross profit

15,764

15,247

27,604

28,842

Operating expenses:

   Research and development

2,528

2,371

4,988

4,700

   Sales and marketing

4,309

3,762

7,254

6,662

   General and administrative

1,156

1,120

2,283

2,283

Total operating expenses

7,993

7,253

14,525

13,645

Operating income

7,771

7,994

13,079

15,197

Other income (expense)

(1)

245

225

348

Income before income taxes

7,770

8,239

13,304

15,545

Provision for income taxes

1,393

1,615

2,461

3,183

Net income

 $     6,377

 $  6,624

 $    10,843

 $12,362

Earnings per share:

   Basic

 $      0.76

 $    0.79

 $        1.29

 $    1.47

   Diluted

 $      0.76

 $    0.78

 $        1.28

 $    1.46

Weighted average shares outstanding:

   Basic

8,393

8,402

8,395

8,397

   Diluted

8,444

8,465

8,480

8,489

Cash dividends declared per
common  share

 $      0.23

 

 $    0.20

 

 $        0.46

 

 $    0.40



MICROSOFT CORPORATION

COMPREHENSIVE INCOME STATEMENTS

(In millions) (Unaudited)

Three Months Ended December 31,

Six Months Ended December 31,

 

2012

 

2011

 

2012

 

2011

Net income

 $     6,377

 $  6,624

 $    10,843

 $12,362

Other comprehensive income (loss):

Net unrealized gains (losses) on
derivatives (net of tax effects
of $(5), $41, $(29), and
$127)

(9)

76

(54)

236

Net unrealized gains (losses) on
investments (net of tax
effects of $103, $67, $251,
and $(552))

192

124

466

(1,025)

Translation adjustments and
other (net of tax effects
of $2, $(67), $92, and
$(134))

3

(125)

172

(248)

Other comprehensive
income (loss)

186

75

584

(1,037)

Comprehensive income

 $     6,563

 $  6,699

 $    11,427

 $11,325



MICROSOFT CORPORATION

BALANCE SHEETS

(In millions)(Unaudited)

 

December 31,
2012

 

June 30, 2012

Assets

Current assets:

  Cash and cash equivalents

 $           6,017

 $      6,938

Short-term investments (including securities
loaned of $7 and $785)

62,295

56,102

Total cash, cash equivalents, and short-term
investments

68,312

63,040

Accounts receivable, net of allowance for doubtful
accounts of $292 and $389

14,317

15,780

  Inventories

1,661

1,137

  Deferred income taxes

1,983

2,035

  Other

3,301

3,092

     Total current assets

89,574

85,084

Property and equipment, net of accumulated
depreciation of $11,773 and $10,962

8,698

8,269

Equity and other investments

10,707

9,776

Goodwill

14,727

13,452

Intangible assets, net

3,341

3,170

Other long-term assets

1,636

1,520

           Total assets

 $       128,683

 $  121,271

Liabilities and stockholders' equity

Current liabilities:

  Accounts payable

 $           4,356

 $      4,175

  Current portion of long-term debt

2,241

1,231

  Accrued compensation

2,942

3,875

  Income taxes

630

789

  Short-term unearned revenue

18,354

18,653

  Securities lending payable

21

814

  Other

3,366

3,151

     Total current liabilities

31,910

32,688

Long-term debt

11,947

10,713

Long-term unearned revenue

1,459

1,406

Deferred income taxes

2,394

1,893

Other long-term liabilities

8,397

8,208

     Total liabilities

56,107

54,908

Commitments and contingencies

Stockholders' equity:

Common stock and paid-in capital - shares
authorized 24,000; outstanding 8,374 and 8,381

66,334

65,797

  Retained earnings (deficit)

4,236

(856)

  Accumulated other comprehensive income

2,006

1,422

     Total stockholders' equity

72,576

66,363

Total liabilities and stockholders’ equity

 $       128,683

 $  121,271



MICROSOFT CORPORATION

CASH FLOW STATEMENTS

(In millions)

Three Months Ended December 31,

Six Months Ended December 31,

 

2012

 

2011

 

2012

 

2011

Operations

Net income

 $     6,377

 $  6,624

 $    10,843

 $12,362

Adjustments to reconcile net
    income to net cash from
    operations:

    Depreciation, amortization, and
       other

1,009

678

1,719

1,404

    Stock-based compensation
       expense

603

575

1,206

1,133

    Net recognized losses (gains)
       on investments and derivatives

22

(112)

33

(142)

    Excess tax benefits from
       stock-based compensation

(9)

(4)

(186)

(74)

    Deferred income taxes

140

14

178

416

    Deferral of unearned revenue

10,737

7,544

18,946

13,683

    Recognition of unearned
       revenue

(10,483)

(8,057)

(19,253)

(15,710)

    Changes in operating assets and 
       liabilities:

       Accounts receivable

(4,488)

(3,652)

1,668

1,081

       Inventories

(33)

891

(506)

(29)

       Other current assets

150

605

(235)

865

       Other long-term assets

(80)

30

(313)

(45)

       Accounts payable

685

176

118

(266)

       Other current liabilities

168

394

(1,119)

(599)

       Other long-term liabilities

(18)

156

165

276

        Net cash from operations

4,780

5,862

13,264

14,355

Financing

Proceeds from issuance of debt

2,232

0

2,232

0

Common stock issued

145

208

562

544

Common stock repurchased

(1,658)

(1,042)

(3,290)

(2,976)

Common stock cash dividends paid

(1,933)

(1,683)

(3,609)

(3,024)

Excess tax benefits from
    stock-based compensation

9

4

186

74

Other

(16)

0

(16)

0

        Net cash used in financing

(1,221)

(2,513)

(3,935)

(5,382)

Investing

Additions to property and
    equipment

(930)

(498)

(1,533)

(934)

Acquisition of companies, net of
    cash acquired, and purchases of
    intangible and other assets

(311)

(8,627)

(1,456)

(9,502)

Purchases of investments

(10,074)

(10,047)

(30,212)

(21,346)

Maturities of investments

1,989

6,061

3,248

8,886

Sales of investments

7,126

7,835

20,433

15,371

Securities lending payable

(393)

(292)

(792)

(358)

        Net cash used in investing

(2,593)

(5,568)

(10,312)

(7,883)

Effect of exchange rates on cash
    and cash equivalents

15

(52)

62

(90)

Net change in cash and cash
    equivalents

981

(2,271)

(921)

1,000

Cash and cash equivalents,
    beginning of period

5,036

12,881

6,938

9,610

Cash and cash equivalents, end of
    period

 $     6,017

 $10,610

 $      6,017

 $10,610

 

 

MICROSOFT CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT REVENUE AND OPERATING INCOME (LOSS)

(In millions) (Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Six Months Ended December 31,

 

 

 

2012

 

2011

 

2012

 

2011

Revenue

 

 

 

 

 

 

 

Windows Division

 $     5,881

 

 $  4,741

 

 $     9,125

 

 $  9,615

Server and Tools

5,186

 

4,737

 

9,739

 

8,953

Online Services Division

869

 

784

 

1,566

 

1,425

Microsoft Business Division

5,691

 

6,310

 

11,192

 

11,945

Entertainment and Devices Division

3,772

 

4,238

 

5,719

 

6,200

Unallocated and other

57

 

75

 

123

 

119

Consolidated

 $   21,456

 

 $20,885

 

 $   37,464

 

 $38,257

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

Windows Division

 $     3,296

 

 $  2,880

 

 $     4,950

 

 $  6,161

Server and Tools

2,121

 

1,950

 

3,858

 

3,503

Online Services Division

(283)

 

(459)

 

(647)

 

(973)

Microsoft Business Division

3,565

 

4,188

 

7,214

 

7,906

Entertainment and Devices Division

596

 

517

 

619

 

860

Corporate-level activity

(1,524)

 

(1,082)

 

(2,915)

 

(2,260)

Consolidated

 $     7,771

 

 $  7,994

 

 $   13,079

 

 $15,197

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.
Upcoming Events
Investor Relations feeds
Email Alerts

Related Information

FY13 Earnings Release Schedule

Q3-Thursday, April 18
Q4-Thursday, July 18
Stock InformationMicrosoft Corp (MSFT)
Stock InformationMicrosoft Corp (MSFT)
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.