logo-loader

Microsoft gains as Q3 results beat expectations on cloud software momentum

Published: 14:48 24 Oct 2014 BST

computer_circuit_350_544a58dd80e4c

Microsoft's (NASDAQ:MSFT) shares rose early Friday after the company's third quarter results topped analyst forecasts, despite a drop in net income, as sales grew on strong hardware and cloud software performance.

Net income in the third quarter was $4.54 billion, or 54 cents per share, compared to $5.24 billion, or 62 cents per share, in the same quarter of 2013.

Operating income came ot $5.84 billion, down from $6.33 billion a year earlier.

The company said it was impacted by $1.14 billion of expenses tied to its restructuring plan announced in July, as well as the ongoing integration of the Nokia device and services business.

Revenue rose to $23.2 billion from $18.53 billion as devices and consumer revenue jumped 47 percent to $10.96 billion and commercial revenue climbed 10 percent to $12.28 billion.

Analysts surveyed by FactSet had forecast Microsoft to earn 49 cents a share on $22 billion in sales. 

In devices and consumer, the company said Office 365 home and personal subscribers totaled more than 7 million, representing more than 25 percent sequential growth. Its Surface Pro 3 took its Surface tablet revenues to $908 million, while its phone hardware revenue exceeded $2.6 billion. Total Xbox console sales more than doubled to 2.4 million as Xbox One launched in 28 new markets.

In the commercial unit, server products and services revenue increased 13 percent, while Office commercial products and services revenue grew 5 percent as customers transitioned to Office 365. Commercial cloud sales also climbed 128 percent, Microsoft said, while its productivity server offerings such as Lync, SharePoint and Exchange collectively grew in the double digits.

"We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,”  said chief executive officer Satya Nadella in a release late Thursday. 

Given the continued cloud momentum, the company said it would continue to invest in high growth opportunities and drive efficiencies across the organization to deliver long-term shareholder value.

Shares of the Redmond, Washington-based company added 1.5 percent to US$45.70 in New York as of 9:39am ET. 

Chesnara reports strong 2023 results with improved cash generation and...

Chesnara PLC (LSE:CSN) chief executive Steve Murray discusses the company's full-year results for 2023 with Proactive's Stephen Gunnion, describing them as strong and particularly highlighting £53 million in commercial cash generation and a dividend coverage of around 150%. The company has...

1 hour, 23 minutes ago