Microsoft (MSFT) this afternoon reported fiscal Q2 revenue in line with expectations and profit a penny ahead of consensus.
Revenue in the three months ending in December rose 5%, year over year, to $20.9 billion, yielding EPS of 78 cents.
Analysts had been modeling $20.92 billion in revenue and EPS of 76 cents.
Windows revenue was down 6%, year over year. Server and Tools revenue was up 11%, Microsoft Office revenue was up 7%. The company had competitive wins in its “Dynamics” business, said investor relations director Bill Koefoed in a phone call following the report.
Xbox had a “huge” quarter, said Koefoed, with revenue up 15%, year over year. The company’s losses in its online services business diminished by $100 million, to a little under half a billion dollars. It was the second consecutive quarter of improvement.
Discussing the decline in Windows, Koefoed remarked that one factor depressing the product were sales of Netbooks, which fell 70%, year over year, in the quarter.
Excluding Netbooks, consumer Windows sales were actually up 2%, year over year, he pointed out.
However, inventory levels at OEMs exiting the quarter were down, said Koefoed, and it wasn’t immediately� clear where that drop came from, he said.
Some of it may have been attributable to flooding in Thailand, about which Microsoft had already warned last week that there would be an impact on Windows sales. But not entirely. The overall decline in PC inventory that was affecting Windows revenue was still not quite explainable, said Koefoed.
Shares of Microsoft are up 48 cents, or 1.5%, at $28.55 up 60 cents, or 2.2%, at $28.74 in late trading.
Microsoft’s conference call with analysts is getting underway now, at 5:30 pm, Eastern, and you can catch the webcast of it here.
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