Microsoft Up 3% After Reporting Better Than Expected FQ1 Revenue Of $23.20B, EPS Of $0.54

After gaining more than 1 percent in regular trading, Microsoft reported its fiscal first quarter 2015 earnings: Revenue totaled $23.20 billion in the period, leading to profits of $0.54 per share. The revenue figure represents a 25 percent year-over-year increase, a large piece of which is due to the Nokia hardware acquisition.

Analysts had expected Microsoft to report $22.02 billion in revenue, and earnings per share of $0.49 to $0.50. The company is up after its large earnings beat in after-hours trading.

In the quarter, Microsoft had operating income of $5.84 billion. The company’s net income (after paying taxes) totaled $4.54 billion. The company ended the period with $89.2 billion in cash and equivalents.

Microsoft’s GAAP earnings per share — $0.54 — include a $0.11 charge. The company’s per-share profitability is down more than 10 percent on a year-over-year basis.


The company reported that its Surface line had revenue of $908 million. That number is damn good, compared to TechCrunch’s pre-earnings scoring chart. The total is more than twice what it reported in its preceding quarter. The Surface Pro 3, it seems fair to say, is selling well.

Phone top line came to $2.6 billion, up from the preceding quarter. A total of 9.3 million Lumia handsets were sold.

In the sequentially preceding quarter, Microsoft reported a partial-period tally of 5.8 million sold Lumias, $1.99 billion in revenue, and a loss of $692 million, or $0.08 per share. In that same quarter, the company reported revenue of $23.38 billion, and earnings per share of $0.55.

Cloud And Friends

On the cloud side of things, Office 365 for consumers grew to 7 million subscribers, up 25 percent from the preceding quarter. According to the company, its “Commercial” cloud top line is up 128 percent year-over-year. That figure does not include consumer Office 365 incomes.

The company’s Devices and Consumer revenue was up 47 percent to $10.96 billion. Its Commercial revenue was up 10 percent to $12.28 billion.

Windows volume liscencing revenue was up 10 percent, which is reasonable, given the recovering PC market. Consumer Windows revenue fell 1 percent. Windows OEM top line fell 2 percent. There is still slack and weakness in PCs, but they market segment is no longer in free fall. Enterprise upgrades to Windows 7, and improved consumer hardware designs appear to be helping to stabilize the category.

A Big Quarter

All told, Microsoft had a strong quarter. The Surface revenue number was a surprise, and we have work to do to figure out how much money the Phone business lost in the quarter, but it seems that most Microsoft product categories are growing, which could indicate sustainable momentum in the medium-term.

The Commercial business did better than expected, I think, but not outside of the normal bounds of reasonableness. Hardware was an obvious positive outlier. Microsoft did not report a new Xbox One sales figure, or a new cloud revenue run-rate statistic, annoyingly. I’m not sure why the company manages to, every quarter it seems, occlude a few important data points. There must be some sort of Ouija board in Redmond they use to make that specific decision.

In the cloud-and-platform pissing contest, Microsoft’s after-hours gains should keep it the second most valuable technology company, over Google, for some time to come.