Microsoft Increases Sales to Businesses and Consumers

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Microsoft was able to buck a major trend among top technology sellers to corporations by posting double-digit percentage increases in revenue and profit.

The Redmond, Washington-based software company demonstrated that it is taking full advantage of its long-standing foothold in business software to expand its business offerings into types of corporate technology.

Rivals not faring well. The company’s rivals, such as Oracle Corp., and International Business Machines Corp. (IBM), have not fared as well in recent months. Microsoft’s strong business sales offset the downturn in the personal computer market and sent company shares up 5.7 percent in after-hours trading.

Microsoft’s “cloud” or Web-friendly business sales doubled, even though they were only a small piece of the company’s total revenue. The advances in this part of the business were led by Office 365, which is a new, online version of the software. Revenue from three of the established software products, including the Exchange corporate e-mail service, increased by a double-digit percentage, according to the company, which expects the trends to continue this quarter.

Good news overall. The company’s sales to consumers were down, but those results were higher than those of previous quarters. Revenues for products like PCs, Surface tablets and XBox game systems were up by 4 percent. Microsoft sold twice as many Surface tablets as it did the previous quarter, which was good news for a product that got off to a rocky start.

Microsoft’s net income was $5.2 billion, or 62 cents a share, compared with a net income of $4.5 billion, or 53 cents per share during the same period one year ago. Analysts were predicting earnings of 54 cents per share, excluding some items. Based on those figures, Microsoft’s earnings during the latest period were 63 cents.

Revenue increased by 15.7 percent to $18.5 billion, which was much higher than the analysts’ predictions of $17.8 billion. Microsoft still has challenges ahead of it in new computing areas, including smartphones, tablets, and, of course, the Web. It will deal with them under new leadership, since the company CEO, Steve Ballmer, announced his retirement last August.

 

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