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Microsoft earnings slip but still beat forecasts

SAN FRANCISCO--Microsoft on Thursday reported quarterly profit slipped as lifestyles continued to shift from personal computers to mobile devices and Internet cloud software.

The U.S. software giant said that it made a profit of US$5.66 billion on US$20.4 billion in revenue in the three months that ended on March 31, a slight dip from the US$6 billion in net income it took in on US$20.5 billion in revenue during the same period a year earlier.

While down slightly year-over-year, the quarterly earnings figures beat Wall Street expectations, bumping Microsoft shares more than two percent to US$40.79 in after-market trading.

“This quarter's results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world,” Microsoft chief executive Satya Nadella said in the earnings release.

“We are focused on executing rapidly and delivering bold, innovative products that people love to use.”

Nadella added that Microsoft is making progress in the increasingly important consumer market with services such as its Bing search engine and Office 365 Home suite of programs hosted in the Internet cloud.

Companies in the business software market that has long been Microsoft's strength are also beingwon over to its cloud offerings, said Nadella.

'Fighting weight'

Nadella, who took over as Microsoft chief in February, is benefitting from restructuring done by his predecessor Steve Ballmer, according to analyst Rob Enderle of Enderle Group in Silicon Valley.

Ballmer streamlined the management structure at Microsoft and made the technology colossus more responsive to customers, making it less likely they will be lured away from its software.

Microsoft also got a boost from an uptick in sales of its Xbox videogame consoles and Surface tablet computers — it sold two million Xbox consoles, with more than half of those its new-generation Xbox One.

Revenue from Surface sales leapt by 50 percent to approximately US$500 million and money brought in from Bing search ads was up 38 percent.

Meanwhile, sales of Windows software to device makers grew four percent in the quarter, and the number of subscribers to Office 365 Home increased by a million to 4.4 million, according to Microsoft.

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