The figures beat Wall Street analyst expectations of revenue of $25.26 billion and earnings per share of 71 cents, while also improving upon the results of the corresponding quarter previous year of $26.5 billion in revenue and earnings per share of 71 cents.
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Excluding the impact of revenue deferrals and restructuring charges, adjusted earnings rose to 78 cents from 70 cents a year earlier.
The better than expected results were driven mainly by Microsoft’s cloud services division, which reported a 5% year-on-year revenue hike to $6.3bn, accounting for more than a quarter of the company’s total revenue.
Overall, Microsoft’s revenue from the quarter ended December 31 was $23.8 billion, a decline of 10 percent from the same period in 2014. The weak PC market led to a 5 percent fall in Windows OEM revenue at constant exchange rates, and revenue from mobile phones fell 49 percent. And finally Xbox Live active users grew to 48 million, that’s 30 per cent up year-on-year.
Last July, Microsoft introduced Windows 10, raising some hope in the industry of a rebound in PC sales. Among the numbers, Microsoft is hanging its quarterly revenue hat on are the gains from its Productivity and Business Processes division.
Microsoft’s CEO Satya Nadella says that the company expects a strong next quarter, specifically thanks to Windows 10, as businesses are now looking into the operating system and piloting it for further deployment. Net income was $6.3 billion.
The company noted that its Windows 10 product is now active on over 200 million devices.
However, revenue from smartphones was down 49pc, raising fresh questions about Microsoft’s plans for the future of its Lumia devices, which it inherited when it acquired Nokia’s handset business for $7.2bn; an acquisition it acknowledged was a failure.
Surface revenue was up 29 percent from a year ago in constant currency.
Microsoft made “significant progress” in boosting its gross margins for Azure and Office 365, and its addition of premium-level offerings in Azure and Office 365 have helped on that front, CFO Amy Hood said on the call.
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Within that, Microsoft said its Azure cloud computing offering saw sales rise by 140% in constant-currency terms.
