News by Luke Jones on Friday October 24, 2014.
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It is one of those times of the year when the giant tech companies offer their financial results for their third (calendar) or fourth (fiscal) quarters. Microsoft is the latest company to do just that and it turns out things are going surprisingly well for a company that is oft rumoured to be struggling in the mobile space.That's certainly partly true as Windows Phone continues to struggle against Android and iOS, while Microsoft's hardware has also struggled, especially the Surface tablet range. Overall device and consumer's revenue grew massively, climbing 47% to $10.96 billion, while Commercial revenue grew 10% to $12.28 billion. This shows that Microsoft's services continue to drive the company, but the figures from hardware will be quietly encouraging for the company as well. The company sold 9.3 million Lumia smartphones through the quarter, a slight rise from the 8.8 million units Nokia shifted the year before. So, Lumia is moving in the right direction albeit slowly and the brand accounted for $2.6 billion in revenue, or around $280 per device sold. Not a bad amount, while Microsoft probably raked in more revenue from other Windows Phone partners, with overall platform sales outside of the Lumia brand estimated at around 2 million units. Surface remains an issue for Microsoft, how could it not after we all remember the $1 billion inventory write off from the first model. However, there is some small growth there, with Surface revenue numbered at $908 million, doubling the amount made the previous year. Most of that revenue seems to have been driven by the Surface Pro 3. The only slight blot on the earning calls was a decline in overall profit from $5.2 billion last year to $4.3 billion during this period, although Microsoft says it is optimistic about future growth. You can check out the full earnings sheet below, or head to the source to get into the nitty gritty of the facts and figures.
REDMOND, Wash. - October 23, 2014 - Microsoft Corp. today announced revenue of $23.20 billion for the quarter ended September 30, 2014. Gross margin, operating income and diluted earnings per share ("EPS") for the quarter were $14.93 billion, $5.84 billion and $0.54 per share, respectively. These financial results include $1.14 billion of integration and restructuring expenses, or an $0.11 per share negative impact, related to both Microsoft's restructuring plan announced in July 2014 and the ongoing integration of the Nokia Devices and Services ("NDS") business. The following table notes the impact of the integration and restructuring expenses on the company's financial performance ("Noted Items"). This financial information is provided to aid investors in better understanding the company's performance. All growth comparisons relate to the corresponding period in the last fiscal year. "We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth," said Satya Nadella, chief executive officer of Microsoft. "Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organization." "We delivered a strong start to the year, with continued cloud momentum and meaningful progress across our device businesses," said Amy Hood, executive vice president and chief financial officer of Microsoft. "We will continue to invest in high-growth opportunities and drive efficiencies across the organization to deliver long-term shareholder value." Devices and Consumer revenue grew 47% to $10.96 billion, with the following business highlights: Office 365 Home and Personal subscribers totaled more than 7 million, representing more than 25% sequential growth over the previous quarter. Surface Pro 3 momentum drove Surface revenue of $908 million. New Windows consumer licensing programs drove positive unit growth while OEM non-Pro revenue declined 1%. Total Xbox console sales were 2.4 million, growing 102%, and Xbox One launched in 28 new markets. Phone hardware revenue exceeded $2.6 billion with ongoing focus on execution discipline. Commercial revenue grew 10% to $12.28 billion, with the following business highlights: Server products and services revenue increased 13%, with double-digit growth for SQL Server, System Center and Windows Server. Office Commercial products and services revenue grew 5% as customers transition to Office 365. Commercial cloud revenue grew 128% driven by Office 365, Azure and Dynamics CRM. Lync, SharePoint and Exchange, our productivity server offerings, collectively grew double-digits. Windows volume licensing revenue increased 10%. "Customers are embracing our latest technologies from Surface Pro 3 and Office 365 to Azure and SQL Server," said Kevin Turner, chief operating officer of Microsoft. "Through great execution by our sales teams and our partners, we have been able to deliver our truly differentiated value to the marketplace." Business Outlook Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast. Webcast Details Satya Nadella, chief executive officer, Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, John Seethoff, deputy general counsel, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today to discuss details of the company's performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor. The webcast will be available for replay through the close of business on October 23, 2015. Noted Items Definition Integration and restructuring expenses include employee severance expenses and costs associated with the consolidation of facilities and manufacturing operations, including asset write-downs and contract termination costs, resulting from Microsoft?s restructuring plan. Integration and restructuring expenses also include systems consolidation and other business integration expenses, as well as transaction fees and direct acquisition costs, associated with the acquisition of NDS. Integration and restructuring expenses were $1.14 billion during the three months ended September 30, 2014, due mainly to restructuring charges of $1.05 billion, including employee severance expenses and the write-down of certain assets in connection with the restructuring plan. About Microsoft Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services, devices and solutions that help people and businesses realize their full potential. Forward-Looking Statements Statements in this release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as: intense competition in all of Microsoft's markets; increasing focus on services presents execution and competitive risks; significant investments in new products and services that may not be profitable; acquisitions, joint ventures, and strategic alliances may have an adverse effect on our business; impairment of goodwill or amortizable intangible assets causing a significant charge to earnings; Microsoft's continued ability to earn expected revenues from its intellectual property rights; claims that Microsoft has infringed the intellectual property rights of others; the possibility of unauthorized disclosure of significant portions of Microsoft's source code; cyber-attacks and security vulnerabilities in Microsoft products that could reduce revenue or lead to liability; disclosure of personal data that could cause liability and harm to Microsoft's reputation; outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure; government litigation and regulation that may limit how Microsoft designs and markets its products; potential liability under anti-corruption and trade protection laws resulting from our international operations; Microsoft's ability to attract and retain talented employees; adverse results in legal disputes; unanticipated tax liabilities; our hardware and software products may experience quality or supply problems; exposure to increased economic and operational uncertainties from operating a global business; catastrophic events or geo-political conditions may disrupt our business; and adverse economic or market conditions may harm our business. For more information about risks and uncertainties associated with Microsoft's business, please refer to the "Management?s Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of Microsoft's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft's Investor Relations department at (800) 285-7772 or at Microsoft's Investor Relations website at http://www.microsoft.com/investor. All information in this release is as of October 23, 2014. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.source: Microsoft
Luke Jones is the Managing Editor at MobileBurn.com and is the person you need to speak to about the content on the site. Luke studied creative writing at degree level before carving out a reputation as a freelance tech writer. He settled here at MobileBurn, where he reviews devices and contributes to the news, as well as overseeing the site's content and direction.