Microsoft reported record first-quarter revenue that topped $18.5 billion, although WIndows OEM revenue dropped 7 percent during the three-month period.


Microsoft reported net income of $5.2 billion for the quarter, a 17.4 percent increase over the previous year. Revenue rose 15.7 percent from the year-ago quarter, beating analyst expectation of $17.29 billion in quarterly revenue.


In all, it was a generally upbeat quarter for Microsoft, which is weathering an ongoing CEO transition, a company reorganization, and a corresponding restructuring of its business units alongside a new revision of its operating system and an update to its Surface tablet as well.


“Our devices and services transformation is progressing, and we are launching a wide range of compelling products and experiences this fall for both business and consumers,” said Steve Ballmer, the outgoing Microsoft CEO, in a statement. “Our new commercial services will help us continue to outgrow the enterprise market, and we are seeing lots of consumer excitement for Xbox One, Surface 2 and Surface Pro 2, and the full spectrum of Windows 8.1 and Windows Phone devices.”


In September, Microsoft reorganized its business structure “to innovate with greater speed and efficiency,” it said. In doing so, familiar Microsoft products now are accounted for in different groups.


All told, Microsoft said that its Devices and Consumer business saw revenue increase 4 percent to $7.46 billion. Within that grouping hides three business units; Devices and Consumer Licensing is probably the most important, containing Microsoft’s Windows business. Revenue in D&C Licensing dipped 7 percent to $4.343 billion; Microsoft said that Windows OEM licensing fell by the same amount. But that was hidden by Windows Pro revenue, which increased for the second consecutive quarter, Microsoft added. Overall, OEM Windows revenue, excluding Windows Pro, fell by 22 percent.


Devices & Consumer Hardware, which houses the Xbox, saw revenue increase to $1.49 billion, a boost of 37 percent.  Revenue for the Microsoft Surface tablet grew to $400 million with sequential growth in revenue and units sold over the prior quarter, Microsoft said.


Microsoft’s Devices and Consumer Other category (Windows Store revenues, Xbox Live, Office 365, and other smaller businesses) saw revenue increase from $1.4 billion to $1.635 billion.


Commercial revenue grew 10 percent to $11.20 billion, Microsoft said.


“We saw strong focus across our teams, generating record first-quarter revenue even as we navigate a fundamental business transition,” said Amy Hood, chief financial officer at Microsoft, in a statement. “Our enterprise renewals were very healthy and our devices and consumer business continued to improve. We are making strategic investments in areas like technological innovation, supply chain management, and global cloud operations to build for the future and create long-term shareholder value.”


Microsoft said it would provide guidance for its second fiscal quarter during its conference call on Thursday afternoon.











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