Summary
Microsoft Corporation's 2013 10-K filing reveals a company navigating significant technological shifts and investing heavily in its "devices and services" strategy. The company reported solid revenue growth, driven by its Server and Tools segment and newer offerings like Windows 8, Surface, and Office 365. However, the Windows Division faced headwinds from a declining PC market, impacting OEM revenue. Key financial highlights include robust operating income growth, largely due to a significant goodwill impairment charge in the prior year that did not recur. The company maintained a strong cash position, with substantial cash held by foreign subsidiaries. Microsoft continued its commitment to returning value to shareholders through dividends and share repurchases. The report also underscores the company's ongoing investment in research and development, highlighting a strategic pivot towards cloud computing and an integrated family of devices and services, despite the inherent risks and uncertainties associated with these transformative initiatives.
Financial Highlights
55 data points| Revenue | $77.85B |
| Cost of Revenue | $20.39B |
| Gross Profit | $57.46B |
| R&D Expenses | $10.41B |
| Operating Expenses | $30.70B |
| Operating Income | $26.76B |
| Interest Expense | $429.00M |
| Net Income | $21.86B |
| EPS (Basic) | $2.61 |
| EPS (Diluted) | $2.58 |
| Shares Outstanding (Basic) | 8.38B |
| Shares Outstanding (Diluted) | 8.47B |
Key Highlights
- 1Revenue increased by 6% to $77.8 billion, primarily driven by growth in Server and Tools and new products like Windows 8, Surface, and Office 365.
- 2Operating income saw a substantial increase of 23% to $26.8 billion, largely influenced by the absence of a $6.2 billion goodwill impairment charge from the prior year.
- 3Diluted Earnings Per Share (EPS) grew by 29% to $2.58, benefiting from the absence of prior year charges and revenue growth.
- 4The company reported $77.0 billion in cash, cash equivalents, and short-term investments, demonstrating a strong liquidity position.
- 5Research and development expenses remained significant at $10.4 billion, representing 13% of revenue, indicating continued investment in innovation.
- 6Significant charges were incurred in the Windows Division, including a $900 million provision for Surface RT inventory adjustments and increased marketing costs for Windows 8.
- 7Microsoft announced a major organizational realignment in July 2013 to better execute its "devices and services" strategy.