It now breaks down earnings into three distinct business units focused on productivity services, cloud, and Windows/devices.
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To make matters worse, Microsoft’s Chief Financial Officer Amy Hood informed analysts that the company is expecting a decline of a comparable amount in its smartphone revenue in the current quarter also.
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. Office 365 revenue jumped 70% compared with Q4 2014 and the cloud-based office suite reached 20.6 million customers.
‘Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas, ‘ said Microsoft chief executive Satya Nadella.
Microsoft shares were up about 8% to around $56 a share after announcing results. While it’s still far from the company’s largest business, revenue from Surface devices grew 29 percent year on year to $1.35 billion on the back of good Surface Pro 4 and Surface Book sales.
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. Adrian noted that the operating system is “doing well enough that a slowing PC market didn’t hurt it as much as it might have”.
“It looks like they are slowly but surely gaining share, that’s the key”, FBR Capital Markets analyst Daniel Ives said.
Perhaps a better indicator of its cloud strength is what the company calls its combined cloud business, on track for $9.4 billion in annual revenue, the company said.
As for the figures, in its first fiscal quarters, which ended on 31 December, the net income that was reported is almost $5 billion, or 62 cents a share, compared with $5.86 billion, or 71 cents a share, during the same period a year earlier.
Revenue from Intelligent Cloud grew 5pc to $6.3bn with Server revenues jumping 10pc and Azure revenues up 140pc.
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The quarter highlighted continued weakness in Microsoft businesses tied to a sluggish personal computer market, including sales of traditional Office software and Windows operating systems to businesses.
