Microsoft Reports Strong Earnings

24-01-2014

Microsoft reported revenue and earnings for its fiscal second quarter that topped Wall Street expectations, as the company sold 3.9 million Xbox One consoles to retailers and doubled revenue from its line of Surface tablets from a quarter earlier. Net income in the quarter through December climbed to $6.56 billion, or 78 cents per share, from $6.38 billion. Revenue rose 14 percent to $24.52 billion. Surface revenue rose to $893 million in the quarter, up from $400 million in the three months through September, as the company benefited from a summertime price cut to its first-generation models, unveiled the Surface 2 and expanded the number of places it is sold at retail. However, analysts continue to question the company's new focus on manufacturing hardware on top of its mainstay software business. The Surface division continued to lose money as the company striven to reach manufacturing scale that would make it profitable. Meanwhile, Xbox One, which launched in November, is still in the money-losing phase typical of new consoles, though that should change in later years as it profits from game sales. The company withstood a steep decline in personal computer sales, which pegged at a 7 percent decline worldwide in the December quarter.