Microsoft Posts Record Revenue Despite Slumping Windows Sales

Paul Lilly

The Windows operating system is Microsoft's bread and butter and added $4.74 billion to the Redmond software giant's bottom line for its second fiscal quarter ended December 31, 2011. Oddly enough, that number represents a 6 percent drop in sales from the prior period. What's more, Windows sales accounted for just 22.7 percent of Microsoft's overall revenue, the lowest share in more than two years.

It didn't matter. Microsoft still posted record revenue of $20.89 billion, up 5 percent from one year prior. The Microsoft Business Division performed particularly well "despite the soft PC market and continuing economic uncertainty in key parts of the world." Business products and services netted Microsoft $6.28 billion for the quarter, up 3 percent year-over-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."

The Xbox 360 also continues to deliver strong results. There are now 66 million Xbox 360 consoles in the wild and 18 million Kinect sensors, along with 40 million Xbox Live members, the latter of which is up 33 percent from a year ago. All this contributed to Microsoft's Entertainment & Devices Division posting revenue of $4.24 billion, a 15 percent quarterly increase.

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