The company’s traditional PC sales business continues to lose business, alongside phone revenue, which has similarly fallen with the revenue stream declining 49%.
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Overall, Microsoft saw its revenue fall two per cent to $25.7 billion (£17.8 billion), with net income up eight per cent to $6.2 billion (£4.34 billion).
Microsoft Corp reported quarterly revenue and profit that beat analysts’ expectations, driven by aggressive cost cutting and growing demand for its cloud products and services.
However, IDC said business should improve later this year as companies that had delayed replacing machines before upgrading to Windows 10 make the switch. Microsoft said it returned $6.5 billion to shareholders in the form of share repurchases and dividends during the quarter. The company reported non-GAAP revenue of $25.7 billion for the last quarter and $0.78 of adjusted per-share profit.
It was a strong holiday season for Microsoft highlighted by Surface and Xbox. This was led by a decline in Windows OEM sales, down by five per cent in constant currency as PC sales continued to decline in the quarter, despite the introduction of Windows 10 at the end of July.
Here’s an interesting stat: Microsoft’s Bing and its Surface lineup contributed more than $2.3 billion of revenue for the company during its second quarter. Microsoft stock went up by about 3% in after-hours trading.
Microsoft reported a better-than-expected second quarter the company grew its cloud footprint and delivered solid gains in Office 365 subscriptions and Dynamics CRM Online seats.
Although Microsoft said Xbox hardware revenue fell because of lower volumes of Xbox 360 sales, it wouldn’t get specific about the number of next-generation consoles it sold during the recent quarter.
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But the future of the company really revolves around the cloud. It’s part of a multi-pronged strategy, along with a push to expand in “cloud” computing, that analysts say is driving the early stages of a financial turnaround, as evidenced by Microsoft’s latest earnings report on Thursday. Microsoft has said in the past that it expects this phone to do well overseas where people don’t have both a computer and smartphone.
