Microsoft Q1 shows 18% decline in profits

Microsoft has reported its first quarter financial results today, with a headline fall in revenue, operating income, net income and earnings per share - although the company did note strong consumer demand for Windows and Xbox products.

Overall revenue fell by 14 per cent to USD 12.92 billion for the three months to the end of September when compared with the same period last year, while profit dropped by 18 per cent to USD 3.57 billion.

Meanwhile EPS was down by 17 per cent to 40 cents, although USD 1.47 billion of revenue was deferred relating to Windows 7 business sales, which would have therefore meant an EPS of 52 cents - a rise of 8 per cent.

In total the Entertainment and Devices division - including the Xbox business - posted a modest rise in revenue to USD 1.89 billion, which translated into an operating income of USD 312 million - almost double last year's figure.

"We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows," said Chris Liddell, chief financial officer at Microsoft. "We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions."

Microsoft stock jumped sharply on the opening of the US markets today and currently stands at USD 28.42, a 6.7 per cent rise on yesterday, at the time of writing.