Microsoft Q2 earnings: $6.56bn profit, record $24.52bn revenue, better Surface numbers
Microsoft reported its earnings for the fourth quarter on Thursday, revealing the Christmas months yielded a record $24.52 billion in revenue and a $6.56 billion profit for the company. Microsoft handsomely beat analyst expectations, and showed growth in its Surface product line along the way.
The Devices and Consumer revenue was the focal point during the quarter, as it helped push Microsoft to its new record, growing 13 per cent to $11.91 billion. In this sector, Surface revenue more than doubled, from $400 million in the calendar third quarter to $893 million in the most calendar fourth quarter. The new Surface models released during the time period can probably be thanked. We have to wonder what the sales would be if supply constraints didn't hamper availability.
Microsoft said it sold 7.4 million Xbox console units into the retail channel during the quarter, including 3.9 million Xbox One consoles and 3.5 million Xbox 360 consoles. That makes for 3.9 million Xbox One consoles sold in five weeks.
Windows OEM revenue declined 3 per cent as the consumer PC market continues to slow down, but the number was offset by "strong" 12 per cent growth in Windows OEM Pro revenue.
“We delivered record revenue as demand for our business offerings remains high and we made strong progress in our Devices and Consumer segment,” Amy Hood, chief financial officer at Microsoft, said. “These results reflect our focus on execution, cost discipline, and long-term shareholder value as we continue to drive the strategic transformation of the company.”
Even with the better than expected earnings, Microsoft still hasn't revealed a new CEO to replace retiring Steve Ballmer. There's a long list of candidates, and Microsoft has vowed to make a decision in the early part of 2014.
In extended trading, investors reacted positively to the earnings news, pushing the stock up close to 4 per cent.
Microsoft didn't mention Windows Phone in its earnings release, nor its upcoming acquisition of Nokia's device unit in the next few months. However, Nokia reported earnings on the same day as Microsoft, showing a slight dip in Lumia Windows Phone sales to 8.2 million, 600,000 less than in Q3 2013.
Microsoft will be holding a conference call at 5:30pm EST to talk specifics. Pocket-lint will be bringing you the latest.