At this time last year Microsoft reported its first annual sales decline, ever. Things are definitely looking up in 2010 for the company that built Windows. Today Microsoft posted its fourth quarter earnings and right off the bat you can see how the 175 million Windows 7 licenses (sold to date) have helped the company cash in a ton of the green stuff. Microsoft posted a record revenue of $16.04 billion for the fourth quarter ended June 30; that’s a 22 percent increase over the year-ago quarter. Profits reached a high of $4.52 billion. For fiscal year 2010, Microsoft posted $62.48 billion of revenue and $18.76 in annual net income. Says Microsoft CFO Peter Klein, “This quarter’s record revenue reflects the breadth of our offerings and our continued product momentum. The revenue growth, combined with our ongoing cost discipline, helped us achieve another quarter of margin expansion.”
Check out the Q4 revenue breakdown by category. Windows and Windows Live racked in $4.55 billion (that’s a 43.5 percent increase from last year). The Microsoft Business Division (which includes Office sales) scored $5.25 billion (a 15 percent increase). The Entertainment and Devices Division (which includes Xbox 360, Zune, and Windows Mobile) picked up $1.6 billion (a 27.3 percent increase). However there was a quarterly operating loss of $172 million. The axing of Kin resulted in a $251 million increase in costs. The Online Services Division (which includes Bing) brought in $565 million; online advertising revenue increased by 19 percent. This category was also in the red, reporting a quarterly operating loss of $696 million. Bing continues to gain marketshare against search giant Google. Last, the Server and Tools Division (which includes Window Server, SQL Server, and Enterprise CAL Suites) brought in $4.01 billion (a 17 percent increase).
Chew on this: 1.5 million Xbox 360 consoles were sold this last quarter and over 25 million people have signed up for Xbox Live. If the launch of Windows Phone 7 is a success and Kinect for Xbox 360 catches on with gamers, Micro$oft might just be able to pull themselves out of the red that the Entertainment and Devices Division has been stuck in for far too long.