Q1'06 Results Meet Expectations

Surprisingly strong growth in SQL Server and OEM sales helped Microsoft take in revenues of US$9.74 billion in the first quarter of fiscal year 2006 (which ended Sept. 30, 2005), an increase of 6% from the same quarter last year. Earnings, which came in at US$3.14 billion (US$0.29 per share) were hurt by a legal settlement with RealNetworks but still came in 24% ahead of the same quarter last year. However, Microsoft warned that year-over-year earnings will decrease in its next quarter, thanks to the costly launch of the Xbox 360 game console.

(For an overview of Q1’06 financials and how they compare with previous quarters, see “Microsoft Financials for the Last Five Quarters“.)

SQL Server Shines, Consumer Businesses Miss

The current quarter saw five of Microsoft’s seven businesses meet or exceed the company’s previously stated expectations. The exceptions were MSN and Home and Entertainment-the company’s two consumer-oriented business segments.

(For a chart showing Q1’06 and Q1’05 revenues and profit or loss by business segment, see “Revenue and Profit (Loss) by Business Segment“.)