Microsoft Reports Record Quarterly Revenue of $20.9 Billion, Net Profit of $6.6 Billion

Microsoft reported its quarterly results for Q4 2011 (Q2 FY2012), with revenue of around $20.9 billion and a net profit of more than $6.6 billion. It has been Microsoft’s best quarter in recent times, with revenue growth of around 5% year-over-year.

Following the earnings release, Microsoft’s stock price has jumped to a 52-week high of more than $29.7. It is still relatively undervalued compared to other tech giants, in terms of its P/E ratio.

2012 is going to be the year of Microsoft, with Windows 8 coming out in mid-2012. Windows Phone is also expected to gain more traction this year.

“We delivered solid financial results, even as we prepare for a launch year that will accelerate many of our key products and services,” said Steve Ballmer, chief executive officer at Microsoft. “Coming out of the Consumer Electronics Show, we’re seeing very positive reviews for our new phones and PCs, and a strong response to our new Metro style design that will unify consumer experiences across our phones, PCs, tablets, and television in 2012.”

Microsoft generated $4.74 billion in revenue from Windows, down 6% primarily because Windows license sales have slowed down, as customers wait for the launch of Windows 8. Windows 7 sold almost 525 million licenses since launch, and Windows 8 will presumably sell even more, fueled by the growing popularity of tablets as well as ultrabooks.

It continued to generate loads of cash from the Business division, comprised mainly of Office, Dynamics, SharePoint etc. Revenue grew 3% to $6.28 billion. Revenue from Servers grew 11% this quarter, to $4.77 billion.

The Entertainment and Devices division showed the most revenue growth, with revenue growing around 15% to $4.24 billion, primarily because of stellar sales of the Xbox and Kinect. Microsoft has sold more than 66 million Xbox 360 consoles and around 18 million Kinect units to date. With Kinect for Windows launching in February, revenue from this division should jump higher in the next quarter.

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