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TMCNet:  Microsoft's quarterly numbers spring past estimates [The Seattle Times :: ]

[January 23, 2014]

Microsoft's quarterly numbers spring past estimates [The Seattle Times :: ]

(Seattle Times (WA) Via Acquire Media NewsEdge) Jan. 23--Microsoft handily beat analysts' estimates in the second quarter of fiscal year 2014.

The company Thursday reported record quarterly sales of $24.52 billion, as well as profit of $6.56 billion and earnings per share of 78 cents.

The results come as CEO Steve Ballmer is expected to retire soon, once Microsoft's board has found his successor. Ballmer had announced in August his intention to retire within 12 months, once his successor is found.

Wall Street analysts, according to a consensus estimate, had expected Microsoft to report quarterly sales of $23.67 billion and earnings per share of 68 cents on profit of $5.74 billion.

Last year, Microsoft had reported second quarter revenue of $21.46 billion and profit of $6.38 billion, or 76 cents per share.

The company attributed the results to double-digit growth in both its Commerical (business-oriented) and Devices & Consumer segments during the quarter, which ended Dec. 31.

Revenue in Devices & Consumer, which includes everything from consumer Windows licenses to Surface, Xbox and Bing, grew 13 percent to $11.91 billion.

Though Windows revenue from manufacturers declined 3 percent, revenue from Surface -- Microsoft launched the second generation of its Surface tablets in the second quarter -- doubled from the previous quarter.

Also launched in the second quarter was the Xbox One console; Microsoft said it said sold it 3.9 million of the devices by Dec. 31.

On the Commercial side, revenue grew 10 percent to $12.67 billion, fueled primarily by double-digit growth in SQL Server and System Center sales.

Here's a more detailed look at how the various groups did within each segment: Devices & Consumer: Licensing (Windows device manufacturers, consumer Windows, Windows Phone, Office consumer, and patents): $5.38 billion revenue, down 6 percent.


Microsoft said revenue from Windows device manufacturers declined 3 percent. But revenue from Windows Pro (meaning Windows 7 Pro and Windows 8 Pro) grew 12 percent, marking the third consecutive quarterly growth.

Hardware (Surface, Xbox and Xbox Live subscriptions, second- and third-party video games, and other hardware): $4.73?billion in revenue, up 68 percent.

Surface revenue for the quarter was $893 million, which Microsoft said was up $400 million from the first quarter. The company did not provide a comparison to a year-ago figure; nor did it disclose how many Surface tablets it sold.

The company said it sold 3.9 million Xbox One consoles, launched in November. That topped the 3.5 million Xbox 360 consoles sold in the quarter.

Other (Bing and MSN, Office 365 Home Premium, first-party video games, marketplaces such as Windows Store, Windows Phone Store and Xbox Live transactions as well as Microsoft retail stores): $1.79 billion revenue, down 10 percent.

Microsoft reported that search advertising revenue grew 34 percent.

Commercial: Licensing:(Windows enterprise, Windows Server, SQL Server, Visual Studio, System Center, Office for businesses, Dynamics, unified communications including Skype, Windows Embedded): $10.89 billion revenue, up 7 percent.

SQL Server and System Center revenue both showed double-digit growth, Microsoft said.

Other (enterprise services, cloud services, including Office 365 for businesses, Azure, Dynamics CRM Online): $1.78 billion revenue, up 28 percent.

The company also said commercial cloud services revenue more than doubled and that customers for both Office 365 commercial and Windows Azure grew in the triple digits.

Microsoft shares closed at $36.06 and in after-hours trading was up 3.7 percent.

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com. On Twitter @janettu.

___ (c)2014 The Seattle Times Visit The Seattle Times at www.seattletimes.com Distributed by MCT Information Services

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