Analysts had been expecting earnings of 59 cents per share and $21.03 billion in revenue.
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The company’s net income rose to $4.62 billion in the quarter, from $4.54 billion past year.
Microsoft revealed an adjusted profit of $5.38 billion, or $0.67 per share.
On the personal computing side, revenue earned from Windows licensing to hardware vendors declined six percent, but this is better than the overall PC market, according to Microsoft, which claimed that the launch of Windows 10 has spurred innovation and helped to drive hardware sales more towards premium devices. Revenues, however, plummeted 12 percent to US$23.2 billion (AU$31.7 billion), partly due to exchange rate fluctuations. With financial discipline and strong execution, we grew operating income by 11 percent in non-GAAP constant currency. Office 365 revenue was way up, nearly 70 percent, with Microsoft now counting 18.2 million subscribers, about 3 million of whom are new.
The Intelligent Cloud segment includes results from public, private and hybrid server products and services such as Windows Server, SQL Server, System Center, Azure, and Enterprise Services. The cloud business was able to realize an 8% (15% in constant currency) increase in gross profit, and management intimated that cloud margins should continue to improve.
Cloud: This was the only reporting segment on the Microsoft balance sheet that grew since the same period past year – and it is also arguably the most important. Still, that was down 17% on an annual basis, and 13% in constant-currency terms.
Microsoft’s latest operating system, Windows 10, is now running on 110 million devices worldwide. Sales of Windows to computer makers fell 6 percent in the quarter – slowing from the double-digit declines seen in recent quarters. Sales in its smartphone business tumbled a stunning 54 percent, which the company said was part of its strategy to streamline its phone offerings. Its Xbox Live active monthly users grew 28 percent. Microsoft recently said it will largely get out of the business of making phones, except for producing a few models aimed at showcasing its software.
But it’s also driving greater adoption.
“If there’s one thing Microsoft is good at, it’s playing catch up”, he said. It includes Office, Office 365 services, and related products.
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Dynamics revenue grew 12 percent, with the Dynamics CRM Online enterprise installed base growing more than 3x.
