Microsoft beats expectations with $26.1bn revenue courtesy Office and Cloud servicesBy Susan Cole Jan 28, 2017
While the fourth quarter has historically been big for Surface, Microsoft had no new models to pitch in 2016 other than the high-priced, in-short-supply Surface Studio. Net income on that basis was $5.2 billion, or 66 cents a share, compared with $5 billion, or 62 cents a share, a year earlier. Diluted earnings per share were $0.66 GAAP and $0.83 non-GAAP.
The company released its numbers on January 26, the first to contain results from their acquisition of LinkedIn in December, and posted a revenue of $26.1 billion for the quarter, up two per cent.
The LinkedIn acquisition is thus far not accretive, with revenues of $230 million and a net loss of $100 million it could take some time for this purchase to bring any meaningful contribution to Microsoft's top and bottom line.
Microsoft Chief Executive Officer Satya Nadella has been working to reposition the company around such internet services.
This segment, which includes results from server products and services (including Windows Server and Azure), grew 8 percent to $6.9 billion.
This segment, which includes results for Windows licensing and devices (Surface, phones, and Xbox), declined 5 percent to $11.8 billion. Microsoft sold its feature phone business in November 2016.
Microsoft beats expectations with $26.1bn revenue courtesy Office and Cloud services
Microsoft said Azure revenue increased 93 per cent as the usage of Azure computing services more than doubled from the year-ago period. This growth was driven by 47 percent revenue growth of Office 365, whereas other contributors - dynamic and consumer Office as well as LinkedIn didn't amount to much.
"Microsoft has shuffled their product groups around a bit for reporting, and they now have three groups named Productivity and Business Processes, Intelligent Cloud, and More Personal Computing", Brett Howse reports for Anandtech.
Alphabet CFO Ruth Porat said the company's 22% increase in revenue for the quarter year-on-year was led by mobile search and YouTube.
Microsoft said that 65 million active devices use Office on iOS and Android (doubling year-over-year), most of whom are used by human beings. Microsoft said revenue in Intelligent Cloud was $6.86 billion and increased 8% (up 10% in constant currency), ahead of the guidance the company had set of between $6.55 billion to $6.75 billion. Intel sales rose more than expected, helped by orders for processors that power data-centre servers - the machines at the heart of cloud computing. On the other hand, the total revenue increased by 1% which led to the sum of Dollars 24 Billion.
Thanks, at least in part to Windows 10 sales into enterprises, according to the company, Microsoft's Windows OEM Pro business was up six percent for the quarter, and its non-Pro (consumer) business was up five percent.
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