Summary
Microsoft Corporation's Q3 FY2010 report for the period ending March 30, 2010, shows robust revenue growth of 6% year-over-year, reaching $14.5 billion, driven primarily by strong sales of Windows 7 and a recovering PC market. Diluted earnings per share saw a significant increase of 36% to $0.45, benefiting from higher net income and substantial share repurchases. Despite revenue growth, the company experienced a notable increase in general and administrative expenses, largely due to legal charges and expenses related to the Yahoo! commercial agreement. The company's balance sheet reflects a strong liquidity position, with cash, cash equivalents, and short-term investments increasing to $39.7 billion. While revenue growth is encouraging, investors should note the impact of revenue deferrals, particularly for the Office 2010 system, and ongoing investments in new products and services. The company's diversified segment performance shows strength in Windows & Windows Live, with a 28% revenue increase, while the Online Services Division continues to incur operating losses, albeit with growth in online advertising revenue, partially offset by increasing costs and transition expenses related to the Yahoo! partnership.
Financial Highlights
54 data points| Revenue | $14.50B |
| Cost of Revenue | $2.75B |
| Gross Profit | $11.75B |
| R&D Expenses | $2.22B |
| Operating Expenses | $9.33B |
| Operating Income | $5.17B |
| Interest Expense | $38.00M |
| Net Income | $4.01B |
| EPS (Basic) | $0.46 |
| EPS (Diluted) | $0.45 |
| Shares Outstanding (Basic) | 8.77B |
| Shares Outstanding (Diluted) | 8.88B |
Key Highlights
- 1Revenue increased by 6% to $14.5 billion for the third quarter, compared to the prior year, primarily driven by strong Windows 7 sales and PC market improvement.
- 2Diluted Earnings Per Share (EPS) rose by 36% to $0.45, reflecting increased net income and the positive impact of share repurchases.
- 3Operating income grew by 17% to $5.17 billion, demonstrating improved profitability from operations.
- 4Cash, cash equivalents, and short-term investments increased to $39.7 billion, showcasing a strong liquidity position.
- 5Windows & Windows Live Division revenue saw a significant increase of 28%, fueled by Windows 7 adoption and PC market growth.
- 6General and administrative expenses increased by 26%, largely due to higher legal charges and expenses related to the Yahoo! commercial agreement.
- 7The company repurchased 67 million shares for $2.0 billion during the quarter, underscoring its commitment to returning capital to shareholders.