Microsoft strong on revenue, weaker with consumers

Jul 21, 2011

Microsoft reported good news for its investors, announcing record revenues for its final quarter earnings and the 2011 fiscal year. But one analyst said slumping sales in Windows shows the company has some weakness when it comes to consumers.

Investors were expecting big numbers after Microsoft CEO Steve Ballmer spilled the beans last month – hinting at record revenues for the Redmond based company. And the latest round of numbers did not disappoint.

“We grew fiscal year ’11 revenue double digits. We also grew earnings per share by more than 20 percent for the second year in a row,” said Microsoft’s General Manager of Investor Relations, Bill Koefoed.

Microsoft’s Office division continued to drive revenue growth for the company. Overall, net income rose 30 percent over last year in the fourth quarter, up to $5.9 billion.

The entire fiscal year pulled in record cash for the company – annual revenue is up about 12 percent from the year before to nearly $70 billion. 

Consumer troubles

Still not all the company's news was rosy. Windows sales are down for the third straight quarter.

Al Hilwa, a tech analyst with IDC, says Microsoft’s exposure is on the consumer side.

“They’ve got to basically pull a rabbit out of the hat with their tablet strategy,” he said.

The boom in tablet sales – dominated by Apple’s iPad – is seen as a big threat to Microsoft’s bottom line as demand for PCs continues to fall.