Microsoft just announced revenue of $24.5 billion for the December quarter, up 14 percent from the same quarter a year ago — crediting growth in both its consumer and commercial business segments.
The company’s earnings per share of 78 cents exceeded, by 10 cents, the expectations of Wall Street analysts polled in advance by Thomson Reuters. The company posted earnings of 76 cents per share in the same quarter a year ago.
Microsoft’s net income was $6.56 billion, up 2 percent from $6.38 billion in the same quarter a year ago.
The result comes as Microsoft CEO Steve Ballmer prepares to hand over the reins to an as-yet-unnamed successor. The company didn’t offer an update on the CEO search in its earnings release. Microsoft’s earnings conference call begins at 2:30 p.m. Pacific time.
“Our Commercial segment continues to outpace the overall market, and our Devices and Consumer segment had a great holiday quarter,” said Ballmer in the company’s earnings release. “The investments we are making in devices and services that deliver high-value experiences to our customers, and the work we are doing with our partners, are driving strong results and positioning us well for long-term growth.”
Microsoft’s shares are up more than 3 percent in after-hours trading.
Here are the key bullet points from Microsoft’s earnings release. Stay tuned for more details as we dig into the numbers and divisional results.
Devices and Consumer revenue grew 13% to $11.91 billion.
Windows OEM revenue declined 3%, reflecting strong 12% growth in Windows OEM Pro revenue, offset by continued softness in the consumer PC market.
Surface revenue more than doubled sequentially, from $400 million in the first quarter to $893 million in the second quarter.
The company sold 7.4 million Xbox console units into the retail channel, including 3.9 million Xbox One consoles and 3.5 million Xbox 360 consoles.
Bing search share grew to 18.2% and search advertising revenue grew 34%.
Commercial revenue grew 10% to $12.67 billion.
SQL Server continued to gain market share with revenue growing double-digits.
System Center showed continued strength with double-digit revenue growth.
Commercial cloud services revenue more than doubled.
Office 365 commercial seats and Azure customers both grew triple-digits.
Update: Microsoft’s strength in its commercial business was driven in part by a refresh of Windows PCs by businesses. Windows “continues to be a fixture within businesses,” said Todd McCommon, Microsoft director of investor relations, in an interview about the results.
However, Microsoft’s consumer software licensing revenue slipped 6 percent for the quarter, to $5.3 billion, which can be traced to the continued challenges faced by Windows PCs in retail stores — where consumers are increasingly opting for tablets instead.
Gross profit fell 14 percent in Microsoft’s Devices & Consumer segment, reflecting the higher cost of producing the new Xbox One console, and increased shipments of the company’s Surface tablets.