By RTT News, October 24, 2013, 06:26:00 PM EDT
(RTTNews.com) - Software giant Microsoft Corp. ( MSFT ) said Thursday after the markets closed that its first quarter profit rose 17% from last year, as strong growth in its commercial licensing business helped offset weakness in its flagship Windows business.
The company's quarterly earnings per share also breezed past Wall Street expectations as did its quarterly revenue.
"We continue to execute well across our businesses and we are seeing robust demand for our enterprise products and cloud services. Strong customer adoption of Office 365, Azure, and Dynamics CRM Online is accelerating our business transition to the cloud," said Kevin Turner, chief operating officer of Microsoft.
Microsoft shares are currently gaining 4.95% in after hours trading after closing the day's regular trading session at $33.72, down 4 cents. The shares trade in a 52-week range of $26.26 to $36.43.
For the first quarter ended September 30, 2013, the world's largest software company reported net income of $5.24 billion or $0.62 per share, compared to $4.47 billion or $0.53 per share for the year-ago quarter.
Excluding $113 million in revenue deferred mainly related to pre-sales of Windows 8.1, Microsoft would have earned $0.63 per share in the latest quarter.
On average, 30 analysts polled by Thomson Reuters expected the company to earn $0.54 per share for the first quarter.
Redmond, Washington-based Microsoft said revenue for the first quarter rose 16% to $18.53 billion from $16.01 billion in the same quarter last year. Excluding deferral, first quarter adjusted revenue grew 7%. Twenty-eight analysts had a consensus revenue estimate of $17.79 billion for the first quarter.
The company's commercial revenue for the quarter rose 10% year-over-year to $11.20 billion, with SQL Server revenue growing double-digits and commercial cloud revenue more than doubling from a year earlier.
Devices and Consumer revenue for the quarter grew 4% to $7.46 billion, but Windows OEM revenue declined 7%.
The completely redesigned Windows 8 operating system has largely failed to take off with consumers. A weak PC market has also hurt Windows sales. Worldwide PC shipments fell 8.6% last quarter, market research firm Gartner Inc. ( IT ) said earlier this month.
The company also said it sold $400 million worth of Surface tablets during the quarter.
Microsoft had a very busy fiscal first quarter. In July, it announced a major company-wide realignment in order to enable faster innovation, efficiency and capability in a fast changing world. In August, Microsoft said that CEO Steve Ballmer will retire within the next 12 months after being at the helm for more than 13 years. Then in September, Microsoft struck a deal to buy Nokia Corp.'s ( NOK ) handset business for $7.2 billion to strengthen its position in mobile.
To appease investors, Microsoft last month announced a 22% increase in its quarterly dividend and the authorization of a new $40 billion share repurchase program.
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