Microsoft Q1 revenues down 14 percent

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Microsoft earned a meager $12.92 billion in the quarter ended Sept. 30, 2009, a 14 percent decline from the same period last year.

Operating income, net income and diluted earnings per share for the quarter were $4.48 billion, $3.57 billion and $0.40 per share, which represented declines of 25 percent, 18 percent and 17 percent respectively, compared with the same period last year.

The results reflect the deferral of $1.47 billion of revenue, an impact of $0.12 of diluted earnings per share, relating to the Windows 7 Upgrade Option program and sales of Windows 7 to OEMs and retailers before general availability. Adding back the deferred revenue, revenue totaled $14.39 billion, a four percent year-over-year decline, and EPS totaled $0.52 per share, an increase of 8 percent over the same period of the prior year.

Silver light at the end of the tunnel

“We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” said Chris Liddell, chief financial officer at Microsoft. “We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions.”

Microsoft is lowering its operating expense guidance to $26.2 billion to $26.5 billion for the full year ending June 30, 2010.

More details will be revealed at a press briefing later today.