It's been a while since an earnings report fromMicrosoft (
) got people talking, but that was the case Friday after the Dow
industrials component reported better-than-expected fiscal
first-quarter earnings and sales growth.
Quarterly profit rose 17% from a year ago to 62 cents a share,
well ahead of the consensus estimate of 54 cents. Sales growth
accelerated from the second quarter, rising 16% to just over
$18.5 billion, nicely above views of $17.8 billion.
Enterprise sales of its Office and server software offset
weakness in its Windows operating system. Declining PC sales are
still a head wind. Earlier this month, Gartner estimated that
worldwide PC shipments fell 8.6% in the third quarter.
Commercial licensing revenue, which includes enterprise
products such as Windows Server, rose 7% to $9.59 billion. Add
cloud computing services to the mix and revenue rose 10% to $11.2
Sales from devices and consumer licensing revenue, which
includes sales from Windows and Windows Phone, fell 7% to $4.34
For the first time, Microsoft revealed quarterly Surface
tablet sales. Sales totaled $400 million, helped in part by
interest in the smaller, heavily discounted Surface RT. Earlier
this week, the company launched its latest tablet models, Surface
2 and Surface Pro 2.
Microsoft has taken its share of shots from the analyst
community, mainly because it was late to the mobile party. Demand
has been lukewarm for its Surface tablet and its Windows phone
hasn't gained much traction. Still, the company is intent on
transforming into a devices and services company.
Last month, Microsoft announced plans to acquire Nokia's
smartphone business for $7.2 billion. Microsoft's latest game
console, Xbox One, set to launch next month.
Microsoft last month raised its quarterly dividend 22% to 28
cents a share for an annual yield of 3.3%.