For its fiscal third quarter, which ended March 31, Microsoft beat analysts’ expectations. The company posted earnings per share of 68 cents on revenue of $20.40 billion. It reported $5.66 billion in profit.
Analysts had expected Microsoft to report earnings per share of 63 cents on revenue of $20.38 billion, with profit of $5.26 billion, according to a Bloomberg consensus estimate.
Earnings per share was down 6 percent, revenue down 0.4 percent and profit down 7 percent from the third quarter last year, when the company posted earnings per share of 72 cents on revenue of $20.49 billion, with profit of $6.06 billion.
But those figures for last year include recognition of previously deferred revenue related to a Windows upgrade offer, an Office upgrade offer, Office pre-sales, and enhancements to “Halo 4.” Adjusting for those recognitions, revenue for the third quarter last year was $18.83 billion, with earnings per share of 65 cents. Comparing that to this year’s figures, quarterly revenue grew 8 percent year over year and earnings per share grew 5 percent.
Here’s how the various groups within each of Microsoft’s two broad segments performed in the second quarter:
Devices & Consumer:
Overall, this segment reported revenue of $8.30 billion, up 12 percent.
• Licensing (Windows device manufacturers, consumer Windows, Windows Phone, Office consumer, and patents): $4.38 billion revenue, up 0.7 percent.
Revenue from licenses sold to Windows manufacturers grew 4 percent.
• Hardware (Surface, Xbox and Xbox Live subscriptions, second- and third-party video games, and other hardware): $1.97 billion revenue, up 41 percent.
This category received a big boost from the launch of Xbox One consoles in November last year. Microsoft sold 1.2 million Xbox One consoles in the third quarter, and 800,000 Xbox 360 units.
Surface revenue grew 50 percent to about $500 million, Microsoft reported.
• Other (Bing and MSN, Office 365 Home, first-party video games, marketplaces such as Windows Store, Windows Phone Store and Xbox Live transactions as well as Microsoft retail stores): $1.95 billion revenue, up 18 percent.
Office 365 Home now has 4.4 million subscribers, up 1 million from last quarter, Microsoft reported.
Overall, this segment reported revenue of $12.23 billion, up 7 percent.
• Licensing: (Windows enterprise, Windows Server, SQL Server, Visual Studio, System Center, Office for businesses, Dynamics, Skype, Lync, SharePoint, Exchange, Windows Embedded): $10.32 billion, up 3 percent.
Windows volume licensing revenue grew 11 percent, the company reported.
Lync, SharePoint and Exchange collectively grew double digits.
• Other (enterprise services, cloud services, including Office 365 for businesses, Azure, Dynamics CRM Online): $1.90 billion, up 31 percent.
Office 365 revenue, as well as commercial seats, about doubled, while Azure revenue grew more than 150 percent.
Microsoft shares were up in after-hours trading, after closing at $39.86.
[Update April 25: The fuller story running in the print edition of The Seattle Times is here.]