Microsoft Sees Record Sales for Last Quarter

Microsoft Corp has posted quarterly revenue and profit that exceeded estimates of Steve Ballmer its CEO, benefitted by sales of game consoles and cloud software in the last months of his tenure at the helm of the software giant.

Revenue was up over 14% to $24.5 billion, which was a new record in the fiscal second quarter ending December 31, announced Microsoft late Thursday.
Analysts had estimated sales of $23.7 billion.

The largest software maker in the world is going through its biggest transition in over a decade as it searches for Ballmer’s successor, implements a new reorganization and works on closing the acquisition of the handset unit from Nokia Oyj.

Microsoft introduced its new Xbox One console for video games during the holiday quarter and boosted its sales of software that is Web-based such as Office 365 and Azure, even as its more traditional programs continued to languish with the shipments of PC’s posting a record decline during 2013.

Shares of Microsoft, based in Redmond, Washington, were up by 5.5% during extended Thursday trading following the announcement of its earnings.

The stock was up over 40% in 2013, while the S&P 500 index was up 30% for the year.

Net income for the latest quarter was up 2.8% to end at $6.56 billion, equivalent to 78 cents per share. That compared to $6.38 billion equivalent to 76 cents per share, for the same period one year ago. Analysts predicted that profit would reach just 69 cents per share.

Unearned revenue, which is from sales on multiyear deals, which will be recognized in months to come, was $19.5 billion in the quarter, compared to $20.5 billion analysts had predicted.

Sales of programs for cloud use like Office 365 and Azure more than doubled compared to the same quarter a year ago and Microsoft sold two times as many tablets as during the first quarter of their fiscal year, said Amy Hood the CFO.

There have been signs of the PC market stabilizing, said Hood, with shipments to businesses increasing for a third straight quarter and PC sales for consumers performing better than had been anticipated by Microsoft.

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