Microsoft reports server-driven record revenues

By Matt Whipp

Posted on 22 Oct 2004 at 14:56

Microsoft has announced a 12 per cent jump in revenues for its first quarter: a record.

The company recorded revenues of $9.19bn for the quarter ended 30 September, beating even the higher analyst estimates of $9.16bn, driven by demand for its server and management products: revenues from its Server and Tools division leapt 19 per cent year on year. In particular, increased hardware demand - especially across the commercial sector - pushed sales of Windows Server, SQL Server and Exchange Server products, as well as the Windows client platform.

'In addition to the success of our flagship server products, we continue to be very pleased with the customer momentum for our management products. The recent release of Microsoft Operations Manager 2005 and the upcoming release of Microsoft System Center 2005 are creating excitement in the market, as evidenced by the greater than 20 per cent revenue growth this quarter in our management server business.' said Eric Rudder, senior vice president, Server and Tools group.

Other divisions also sparkled: MSN stayed in the black with a 10 per cent revenue growth, Home and Entertainment boasted 9 per cent revenue increases on strong Xbox sales, with game sales helping to cut operating losses nearly by half.

'We've had a strong beginning to what we expect will be a very good year with continued growth in both our commercial and consumer businesses,' said John Connors, CFO at Microsoft. 'This quarter we had a very healthy commercial server and desktop business driving double digit revenue growth, and we expect to continue the trend of growing revenue faster than expenses as we work to make each of our businesses more efficient and profitable.'

Microsoft's outlook for the subsequent quarter is for revenues in the range of $10.3bn to $10.5bn and earnings per share at 28 cents.