Launches, PC Sales Weigh on First Quarter

Launch presales and slow PC sales reduced Windows and Office revenue and produced an 8% year-over-year decline in overall Microsoft revenue for the quarter ended Sept. 30, 2012, the first quarter of Microsoft’s 2013 fiscal year. Operating income also fell 26%. However, the Server and Tools division turned in strong results, and Microsoft drew more business in long-term agreements that will pay off in future quarters. The company has revised forecasts for the 2013 fiscal year, but it has not yet told investors how they will be affected by its Surface tablet hardware business.

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

PC Sales Slow Business, Windows Divisions

Microsoft reports its financial results and gives financial guidance to investors in five divisions. (For a chart detailing the results of each division, see “Revenue and Profit (Loss) by Business Segment“.)

Business Division Poised for 2013 Versions

The Business division, Microsoft’s largest by revenue and income, includes Office; business servers such as Exchange, SharePoint, Lync, and Dynamics CRM; and the Office 365 cloud services. The division’s revenue fell 2% from the same quarter last year to US$5.50 billion, with an operating profit of US$3.65 billion, down 2%.