Microsoft Discloses Its Winners, Losers

Microsoft Corp. for the first time is providing details on how much money its individual products are earning -- and losing.

The figures contained in the software giant’s fiscal first-quarter filing late Thursday with the Securities and Exchange Commission include no major surprises.

But the numbers underscore how patient the Redmond, Wash., firm is with units that are a long way from breaking even -- and the enormous profitability of the flagship products, which allow Microsoft to keep investing in new areas for years.

At the head of the cash-cow list is Windows, the operating system powering more than 90% of the world’s personal computers. Microsoft’s “client” division, which is home to Windows, boasted operating income of $2.48 billion on sales of $2.89 billion in the three months ended Sept. 30.

The “information worker” division -- driven by the Office set of word-processing, spreadsheet and other programs -- produced income of $1.88 billion on sales of $2.39 billion.

The only other segment in the black was the one producing Microsoft’s server operating systems, which reaped $519 million on sales of $1.52 billion. All three of these divisions improved in sales and profit from a year earlier.

Some of that money went to finance the four other operating businesses, the most costly of which was “home and entertainment,” featuring the Xbox video game console. That unit lost $177 million on sales of $505 million.

Negative profit margins also were attributed to the MSN Internet access and services segment, which lost $97 million on sales of $531 million; and hand-held and mobile phone software, which drained $33 million on sales of $17 million.

And the “business solutions” effort to sell software to small- and medium-size businesses, lost $68 million on sales of $107 million.

Microsoft shares lost 30 cents Friday to close at $56.69 in Nasdaq trading.