First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.
Microsoft grows earnings, revenue in Q1, helped by server software
- — 24 October, 2013 21:12
Microsoft's revenue and earnings per share grew more than 15 per cent each in its first fiscal quarter of 2014, during which enterprise server software products sold particularly well, according to the company.
Microsoft generated revenue of US$18.5 billion in the quarter, ended September 30, up 16 per cent compared with last year's first quarter and topping the $US17.8 billion consensus estimate of Wall Street analysts polled by Thomson Financial.
Net income came in at $US5.2 billion, or $US0.62 per share, up from $US4.5 billion, or $US0.53 per share, in last year's first quarter. That comes out to about a 17 per cent increase in earnings per share.
These numbers include the deferral of $US113 million of revenue primarily related to Windows 8.1 pre-sales, the company said. Meanwhile, last year's first-quarter report included the deferral of $US1.4 billion of revenue related to several Windows and Office offers and pre-sales.
On a pro forma basis, which excludes certain one-time items, earnings per share were $US0.63, down 3 per cent year-on-year but exceeding the consensus expectation of analysts by $US0.09.
"Our devices and services transformation is progressing and we are launching a wide range of compelling products and experiences this fall for both business and consumers," said CEO Steve Ballmer in a statement.
Ballmer, who is slated to retire at some point in the coming 10 months or so, was referring to the company's ongoing effort to reinvent itself from a provider of packaged software into a provider of hardware devices and cloud-hosted services.
In this quarter, Microsoft is introducing a new financial reporting format for breaking down its revenue and profits. The format splits the company's business into two main buckets: Devices & Consumer and Commercial. The first bucket in turn has three subcategories, and the other one has two subcategories.
Devices & Consumer revenue grew 4 per cent to $US7.46 billion. Microsoft highlighted that in this category Windows OEM revenue fell 7 per cent year-on-year, while revenue from the company's Surface tablets grew to $US400 million, including an increase in revenue and units sold compared sequentially with the fourth fiscal quarter of 2013. Search advertising, provided via websites like the Bing search engine, grew 47 per cent year-on-year.
In the Commercial category, revenue grew 10 per cent to $US11.2 billion, helped by strong sales of server software products like SQL Server, Lync, SharePoint and Exchange, as well as by a jump of more than 100 per cent in revenue from enterprise Cloud services.
When it announced the new reporting format last month, Microsoft said that it would provide more transparency and clarity into its business. The company also said the new format better represents the company's transformation into a provider of hardware devices and cloud services.
However, some critics pointed out at the time that the new format might accomplish just the opposite, making it more difficult to evaluate how certain products are faring in the market, because of two main reasons.
First, the new format mixes very different products into the same subcategories, complicating efforts to single out how a particular product performed. Second, the new format also splinters the results of certain key products like Windows and Office into several subcategories, making it hard to get a unified view of their sales.
Indeed, in the press release Microsoft issued to announce the first-quarter results, the company didn't provide enough granular data in it for investors, customers, analysts and other interested parties to get a clear view of how many of its products did during the period.