Redmond reveals earnings report for fiscal second quarter

Jan 27, 2017 04:37 GMT  ·  By

Microsoft has posted its earnings report for the fiscal second quarter, beating analyst expectations with revenue of $24.1 billion and net income of $5.2 billion, mostly thanks to growth experienced by several units, including cloud, Windows, and Surface.

The star of the show was this time Azure, with Microsoft’s cloud offering growing no less than 93 percent from the previous quarter. Revenue in Intelligent Cloud was $6.9 billion and increased 8 percent, despite the 4 percent decrease of Enterprise Services.

As far as the More Personal Computing unit is concerned, the performance here dropped 5 percent over the previous quarter to $11.8 billion, despite the 5 percent increase in Windows OEM revenue. Gaming revenue, however, dragged the unit down with a 3 percent decrease, due to what the company calls “lower Xbox console revenue offset by Xbox software and services revenue growth.”

The Productivity and Business Processes unit was all about increases during the quarter, and Microsoft recorded growth in every single area. The unit generated $7.4 billion revenue (up 10 percent from the previous quarter), with Office commercial products and cloud services increasing 5 percent. Office consumer products posted a record growth - 22 percent, while Dynamics products revenue increased 7 percent.

LinkedIn in, feature phones out

Also notable for the quarter is the acquisition of LinkedIn, which was completed on December 8, and the software giant says this generated revenue of $228 million, but a net loss of $100 million.

It goes without saying that Microsoft can’t be anything but pleased with these results, so the company’s execs keep praising the cloud business, which continues growing every quarter.

“I am pleased with our results this quarter. We see strong demand for our cloud-based services and are executing well on our long-term growth strategy,” said Amy Hood, executive vice president and chief financial officer at Microsoft.

Overall, Microsoft returned $6.5 billion to shareholders for the quarter, and the company completed not only the acquisition of LinkedIn but also the sale of the feature phone business in November 2016.