FILE - In this Thursday, Aug. 23, 2012, file photo, the new Microsoft logo is seen above the entrance to a company store in Seattle. Microsoft Corp.'s net income fell 22 percent in the latest quarter as it deferred revenue from the sale of its upcoming Windows 8 operating system to PC makers, and as PC sales in general took a dive. The software company's net income was $4.47 billion, or 53 cents per share. That was down from $5.7 billion, or 68 cents per share, a year ago, and exceeded analyst estimates, which had been in the 50-52 cent range. (AP Photo/Elaine Thompson, File)
FILE - In this Thursday, Aug. 23, 2012, file photo, the new Microsoft logo is seen above the entrance to a company store in Seattle. Microsoft Corp.'s net income fell 22 percent in the latest quarter as it deferred revenue from the sale of its upcoming Windows 8 operating system to PC makers, and as PC sales in general took a dive. The software company's net income was $4.47 billion, or 53 cents per share. That was down from $5.7 billion, or 68 cents per share, a year ago, and exceeded analyst estimates, which had been in the 50-52 cent range. (AP Photo/Elaine Thompson, File)
NEW YORK (AP) ? Microsoft Corp.'s net income fell 22 percent in the latest quarter as it deferred revenue from the sale of its upcoming Windows 8 operating system to PC makers ? and as PC sales in general took a dive.
The economic troubles in Europe also weighed on results, which missed Wall Street expectations.
The software company said Thursday that net income was $4.47 billion, or 53 cents per share, in the fiscal first quarter, which ended Sept. 30. That was down from $5.7 billion, or 68 cents per share, a year ago.
Analysts were on average expecting 56 cents per share, according to FactSet.
Revenue fell 8 percent to $16 billion, missing the average analyst estimate of $16.5 billion.
Microsoft shares fell 93 cents, or 3.1 percent, to $28.57 in extended trading, after the release of the results.
The company deferred $783 million in license fees for PCs pre-loaded with Windows 8 because it can't recognize the revenue until the units go on sale on Oct. 26.
It also deferred $384 million in license fees from PCs that shipped with Windows 7 but are eligible for a $15 upgrade to Windows 8.
Lastly, it deferred $189 million for the PCs that shipped with the new version of Office or are eligible for an upgrade.
Excluding those deferrals and other adjustments, net income was $6.66 billion, or 65 cents per share, down 7 percent from last year. Revenue was flat with last year's figure at $17.3 billion.
Excluding the deferrals, revenue for the Windows division fell 9 percent from a year ago, in line with the decline in global PC shipments in the third quarter reported by research firms Gartner and IDC. Consumers held off buying PCs ahead of Windows 8 and probably steered some of their electronics dollars toward tablets and smartphones.
Windows 8 is the most significant revamp since Windows 95 and sports a completely new look that's intended to be consistent across PCs, tablets and smartphones. It's designed from the ground up for touch-sensitive screens, and Microsoft has high hopes that it will keep Windows relevant in a world where tablets are starting to eat into PC sales.
The Business Division, Microsoft's largest, posted a 1 percent increase in revenue, excluding the deferrals for Office.
The Servers and Tools division, which makes software for servers and software developers, was the star of the quarter for the Redmond, Wash., company, posting an 8 percent increase in revenue.
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