News

Microsoft Revenues Continue to Climb

Not everything was profitable, though: OEM business dropped 13 percent.

• By Kurt Mackie
• 01/27/2015

Microsoft is making a habit of confounding the predictions of those who claim that the company will slide into irrelevancy.

Revenue for the second quarter earnings for fiscal-year 2015, which ended on Dec. 31, 2014, was $26.47 billion, up 8% from the year-ago second quarter. Diluted earnings per share was $0.71, down 9%. Analysts had expected $26.3 billion in revenue and $0.71 earnings per share.

Once again, like last quarter, Microsoft reported a negative pull on its financial results because of the costs associated with its July 2014 restructuring efforts, along with its Nokia integration. Those costs pushed earnings per share down by $0.02.

While overall earnings were up, the Devices and Consumer business segment was down year over year (see chart). There was a 13% decline in "Windows OEM Pro revenue" and a 13% decline in "Windows OEM non-Pro revenue" for that segment, according to Microsoft's Q2 report.

Microsoft's report, though, claimed that revenue from the Devices and Consumer segment actually grew 8% to $12.9 billion. The company earned $1.1 billion from Surface device sales, up 24%. It reported Phone hardware revenue of $2.3 billion, with 10.5 million Lumia device sales.

Microsoft now has 9.2 million subscribers to its Office 365 Home and Personal editions, as well as a total of 6.6 million Xbox units sold, according to its Q2 report.

The Commercial business segment had a 5% increase to $13.3 billion in revenue for the quarter. Server products showed a 9% growth, while Windows volume licensing revenue grew by 3%.

Commercial Office suite product revenue decreased by 1%. The decrease was due to some organizations switching to Office 365 services, plus a pause in PC buying following Windows XP refreshes, according to Microsoft's report.

Microsoft's Q2 earnings reports can be found at this page.