Rising Surface Sales Helped Microsoft Post $6.3 Billion Quarterly Profit

Revenue fell very slightly to $25.69 billion, but this was still higher than analysts expected; the slight drop has been partially blamed on a decreased interest in Windows.

Excluding the impact of revenue deferrals and restructuring charges, adjusted earnings rose to 78 cents from 70 cents a year earlier.

Microsoft also returned $6.5 billion to shareholders in the form of share repurchases and dividends. Microsoft said this was driven by the launch of the new Surface Pro 4 and Surface Book laptop towards the end of the year.

Yesterday Microsoft released the figures for its quarter ending on December 31, 2015 (Q2 in its 2016 financial year).

Revenue for Microsoft’s “Intelligent Cloud” segment rose 5 per cent to $US6.34 billion. However, Xbox hardware revenue declined because of lower Xbox 360 sales, though the company did not provide specific numbers.

CEO Satya Nadella has focused on cloud services and mobile applications on slower growth in its traditional software business. Office 365 now has 20.6 million subscribers.

“Intelligent Cloud”, as Microsoft dubs its division, also covers Windows Server and enterprise software sales, making it hard to pick out just how much Azure made by itself, making a direct comparison to AWS very hard.

However, Nadella said businesses are piloting Windows 10, which he expects will drive deployments beyond 200 million active devices.

Revenue for Windows phones fell 49% year-over-year. Azure revenue alone grew a whopping 140 percent. “Microsoft’s cloud story continues to be solid; while Amazon missed a bit, Microsoft continues to show Wall Street it knows how to set and meet expectations, which the Street values highly”, Merv Adrian, research vice president of Information Management at Gartner, told eWEEK.

Non-GAAP revenues were down 10 per cent on the year at $25.7bn, with the Personal Computing division’s takings of $12.7bn down 5 per cent, and Productivity and Business Processes down 2 per cent at $6.7bn.

Additionally, the company’s offerings with its XBox Live gaming service has now reached 48 million users, a 30% increase when compared to the same time previous year.