Vista, Office Launches Boost Q3'07 Earnings

The Jan. 2007 consumer launches of Windows Vista and the Office 2007 System product family helped Microsoft earn a record US$4.93 billion on US$14.40 billion in revenue during its third quarter of fiscal year 2007 (Q3’07), which ended Mar. 31, 2007. Even without the one-time recognition of revenue deferred from previous quarters (due to upgrade programs for Vista and Office), revenue would have grown 17% from the previous year’s quarter. The strong quarter caused Microsoft to increase its guidance for FY’07, but the company warned that growth in FY’08 would probably be slower, now that these flagship product launches are out of the way.

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

Core Businesses Shine

Microsoft’s core businesses—desktop OSs, business software, and server software—all did well during the quarter, showing 22% revenue growth before the one-time effect of recognizing deferred revenue from upgrade programs for Vista and Office 2007. However, the company’s online and entertainment businesses continued to rack up sizeable losses.