Microsoft has posted its first-quarter earnings for the 2016 fiscal year. The results beat Wall Street expectations but still aren't anything worth bragging about - at least when it comes to certain categories.
The company reported $20.4 billion in revenue, which is down 12 per cent year over year, while income dipped 1 per cent from the same period last year, coming in at $5.8 billion. Net income was at $4.6 billion, a 2 per cent increase.
But enough of the financial stuff; we want to know sales. Microsoft said Surface revenue fell from $908 million during last year's first quarter to $672 million this year, which the company said is likely due to its flagship tablet, the Surface Pro 3 being released in June 2014. Also, the Surface Pro 4 came out this month.
Microsoft's phone revenue also took a beating, as it dropped 54 per cent year over year, while Windows OEM revenue fell 6 per cent. The other major blow came from Xbox hardware revenue. Microsoft didn't reveal how many Xbox systems were sold, but Xbox hardware sales fell 17 per cent year over year.
Not everything was bad news...
Microsoft's Gaming revenue grew 6 per cent. Cloud services are going strong as well, having spiked 8 per cent to $5.9 billion in revenue during the 90-day period that ended 30 September. Other improved areas include Bing, with revenue up 29 per cent, and Office 365 revenue went up 70 per cent.
Office 365 actually has 3 million new subscribers, bringing the total to 18.2 million subscribers. As for Xbox Live, it has 39 million monthly active gamers, which is a 28 percent year-over-year increase. Its revenue increased 17 per cent, too. Video game revenue even grew by 66 per cent, driven by Minecraft sales, which Microsoft acquired in 2014.
Although these earnings beat analysts' expectations, and stock is trading up following their release, The New York Times claimed Microsoft is laying off 1,000 employees this week (that's less than 1 per cent of its workforce).
Tune into the company's conference call at 2:30 pm PST to hear Microsoft executives discuss the results.