Microsoft Reports First Quarter Results--Revenues from Dynamics Show Decline

Microsoft reported that its business division, which includes the Microsoft Dynamics product line, suffered an 11% decline in revenue from Q1 2009, down from $4.9 billion to $4.4 billion and a 10% decline in operating revenue, down from $3.1 billion to $2.9 billion. The 10Q indicated more specifics on the business market:

"Business revenue decreased $161 million or 4%, primarily reflecting a decline in licensing the 2007 Microsoft Office system to transactional business customers and a 6% decrease in Microsoft Dynamics revenue, offset in part by growth in multi-year volume licensing agreement revenue. The growth in multi-year volume licensing agreement revenue primarily reflects recognition of deferred revenue from previously signed agreements."

CRM revenue appears to be the one Dynamics-related high point for the company, with "double digit" revenue growth, a positive exception that has been touted before.

Overall, Microsoft reported earnings for the 2010 fiscal year's first quarter today, in which the company touted successful execution on their financial goals in light of a 4% revenue decline over the same time last year, with net income down 18% and sales down 14%. The stock jumped 10% in early trading Friday and held onto 7% gains at midday.

"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."