Microsoft grows revenue, improves profits in Q2

Revenue from Surface tablet sales more than doubled sequentially from the first quarter

Microsoft reported record revenue for Q2 2014.

Microsoft reported record revenue for Q2 2014.

A big jump in sales in Microsoft's consumer hardware devices unit, which includes its Xbox gaming console and Surface tablets, helped the company grow its revenue 14 percent and slightly improve profits year-on-year in its second fiscal quarter.

Microsoft's revenue in the quarter ended December 31 came in at $US24.51 billion, exceeding the consensus expectation of $23.68 billion from Wall Street analysts polled by Thomson Financial.

Net income grew from $US6.38 billion, or $US0.76 per share, in 2012's second fiscal quarter, to $US6.56 billion, or $US0.78 per share, Microsoft said.

The Devices & Consumer Hardware unit grew its revenue from $US2.80 billion to $US4.72 billion, as Microsoft sold 7.4 million Xbox gaming console units into the retail channel, almost 4 million of them the new Xbox One model.

Meanwhile, revenue from Surface tablet sales more than doubled sequentially, from $US400 million in the first quarter to $US893 million in the second quarter.

Devices & Consumer Licensing revenue dropped from $US5.70 billion to $US5.40 billion year-on-year, as sales of Windows to hardware partners that in turn resell it with their PCs, tablets and other devices declined 3 per cent. Windows OEM Pro sales to businesses grew 12 per cent, but Windows OEM sales to consumers erased that gain.

Devices & Consumer Licensing also includes sales of Office to consumers, Windows Phone and intellectual property licensing.

The "Other" category of Devices & Consumer saw its revenue fall as well from $US2 billion to $US1.8 billion. This category includes, in part, sales of online ads in Microsoft's websites and sales of Office 365 Home Premium, the subscription-based version of Office for consumers. Search ads revenue grew 34 per cent.

Overall, the Devices & Consumer revenue grew 13 per cent to $US11.91 billion.

Meanwhile, Commercial revenue grew 10 per cent to $US12.67 billion, helped by strong sales growth of SQL Server, System Center and enterprise cloud computing products, like Office 365, Azure services and Dynamics CRM Online.

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesMicrosofthardware systemssoftwarefinancial resultsmobileinternet

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?