Microsoft's Q2 2012 earnings report is in, and the company announced a record revenue of $20.9 billion — a 5 percent increase from the same period last year. Despite slowing PC markets, Microsoft's Business and Entertainment & Devices divisions appear to have helped the company's sales this quarter. Strong Xbox and Kinect sales boosted that particular division by 15 percent from the prior period, bringing it close to the same revenue generated by the Windows division. Microsoft's Server & Tools business posted $4.77 billion in revenue, an 11 percent increase from the prior year period. Overall, the company didn't take quite as much money home this quarter, though: Operating income, net income, and diluted earnings per share for the quarter were $7.99 billion, $6.62 billion, and $0.78 per share, compared with $8.17 billion, $6.63 billion and $0.77 per share, respectively, in the same period last year.
The big news came from Microsoft's Windows and Windows Live division, which posted revenue of $4.74 billion, a six percent decline from the prior period — drawing a line under the slow down of traditional PC sales. Microsoft warned investors at CES 2012 that PC shipments may have dropped below analyst estimates, and it appears Windows revenue was dented due to this. Competition from Apple's strong iPad and MacBook Air sales has helped slow down shipments of traditional PCs, and Microsoft is clearly banking on Windows 8, its latest operating system designed for tablets, to help reverse this trend.
Microsoft CEO Steve Ballmer chose to reflect on the company's final CES appearance in his earnings statement. "Coming out of the Consumer Electronics Show, we’re seeing very positive reviews for our new phones and PCs," said Ballmer before looking towards the company's Metro style design across phones, PCs, tablets and televisions in 2012.
Microsoft stock is up two percent in after hours trading on the NASDAQ at the time of writing.