We didn’t expect that Microsoft’s Q1 earnings call would be a positive one, but the news for Microsoft shareholders was better than most expected.
The company reported a first-quarter profit of $5.24 billion, which amounts to 62 cents per share, with revenue of $18.53 billion. By contrast, in Q1 last year Microsoft reported a $4.7 billion profit and revenue of $16 million, which was 53 cents her share.
Analysts had predicted the Q1 earnings to be 54 cents per share and a revenue of about 11%, or $17.8 billion. The better-than-expected results sent the companies shares to $35.79 in after-hours trading.
The surprisingly strong results come just weeks after current CEO Steve Ballmer announced that he’d be retiring sometime next year. Some have been pushing for Ballmer to exit as they feel that Microsoft has been more reactionary than proactive in developing new products.
They might be right, as the company’s traditional moneymakers like Windows and Office are showing declining sales year over year. This is mostly due to a decline in overall sales of traditional PCs as more people are turning to smartphones and tablets for casual online computing.
That said, Microsoft is using its resources to try to compete in these new markets, attempting to take part in the tablet market with the second-generation Surface devices and through its recent acquisition of Nokia’s phone unit.
Microsoft continues to be a company that knows how to make a profit, though. With the alread-sold-out launch of the Xbox One just around the corner and the holiday season arriving soon, we should see more positive quarters in the future.
A way to illustrate this is that this Q1 report mark the first time Microsoft has divided up its earnings news into consumer and commercial units, a change that likely resulted from the company-wide reorganization that took place a few months ago. Still, these earnings are still from the land of Ballmer’s Microsoft, and they look it. There’s no telling what these reports will look like once he’s gone.
from Forbes.com: Most popular stories http://www.forbes.com/sites/matthickey/2013/10/24/microsoft-reports-q1-2014-earnings-and-its-good-news/
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