Solid Growth in Q1'07

Continuing strong growth in the Server and Tools business segment and efficiencies in Xbox 360 production gave Microsoft US$3.48 billion in net income on US$10.81 billion in revenue in Q1’07 (the quarter ended Sept. 30, 2006), ahead of its previously stated expectations. The company increased FY’07 revenue estimates slightly to account for the strong quarter but noted that it will have to defer approximately US$1.5 billion from Q2 to Q3 as a result of offering discounted upgrades for upcoming products.

(For a chart detailing Microsoft’s recent financial performance, see “Microsoft Financials for the Last Five Quarters“.)

Servers, Xbox Beat Expectations

Four of Microsoft’s five business segments met or exceeded the company’s previously stated revenue goals for Q1, with Server and Tools and Entertainment and Devices showing particularly strong growth, and the Client segment coming in slightly below expectations. (For a chart detailing the results of each business unit, see “Revenue and Profit (Loss) by Business Segment“.)