Slow PC Sales Weaken Earnings

Strong sales to businesses helped Microsoft overcome slow PC sales and bring in US$20.9 billion in revenue in the second quarter (ended Dec. 30, 2011) of its 2012 fiscal year, a 5% increase from last year’s second quarter. Net income declined very slightly year-over-year to US$6.62 billion from US$6.63 billion. The company’s server businesses were particularly strong, which helped compensate for lower sales and margins in some of the company’s consumer businesses, as well as expansion of its lower-margin professional services arm.

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

Servers Bright Spot in Slow PC Market

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

Business Division Benefits from Corporate Growth

The Business division, Microsoft’s largest by revenue and income, includes Office; business servers such as Exchange, SharePoint, Dynamics CRM, and Lync; and the Office 365 cloud applications. The division increased revenue 3% from the same quarter last year to US$6.28 billion, with an operating profit of US$4.15 billion.