Published: Sun, October 25, 2015
Economy | By Melissa Porter

Microsoft Earnings Outperform Market Expectations

Microsoft Earnings Outperform Market Expectations

Yet, a robust cloud-services business helped Microsoft beat quarterly estimates, and post net income of $4.62 billion, or 57 cents a share, during the period.

Meanwhile, revenue in Microsoft's Productivity and Business Processess unit was down 3% to $6.3 billion, while the More Personal Computing unit, which includes Windows, was down 17% to $9.4 billion.

It seems as Microsoft is heading towards where it wants to be, and was awarded for its good job by the investors, which drove the company's stock price up more than 8 percent in late trading Thursday.

"We are making strong progress across each of our three ambitions by delivering innovation people love", said Satya Nadella, chief executive officer at Microsoft. Three million more people joined the Office 365 subscription service, and Microsoft's little-known Salesforce competitor called Dynamics even recorded a 12 percent growth in sales while tripling the number of its customers.

Revenue from its mobile phone operations slumped 54 per cent from a year ago as it cuts back on its handset business acquired from Nokia.

This marked Microsoft's first earnings report under its new reporting structure, something analysts have been looking forward to for a few time.

Sales of Windows 10, a key for Microsoft's cloud and consumer device strategy, were not robust, with the company blaming weak PC sales overall for the lackluster performance of its operating system.

The Microsoft Earnings Release FY16 Q1 showed revenue of $21.66bn during the quarter ending 30 September.

Revenue in Productivity and Business Processes declined 3 percent to $6.3 billion. That's down from the previous year, when Microsoft generated more than $23 billion, but both figures were better than what Wall Street had anticipated. Office 365 consumer subs grew by ~3M Q/Q to 18.2M; Dynamics revenue grew 12%. Revenue from server products and cloud services revenue grew by 13 percent. Customers for Enterprise Mobility doubled YoY exceeding 20,000 and install base grew 6x YoY.

Search revenue from advertising rose 29%, before the cost of traffic acquisition, or "TAC". Xbox Live's monthly users increased 28% YoY to 39 million.DISCLOSURES: Stifel Nicolaus and FBR Capital Markets act as market makers for Microsoft.

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