Microsoft Beats Street With Enterprise Clout
The software behemoth surpasses analyst expectations on the strength of its business portfolio. A sign that the "One Microsoft" strategy is paying off?Microsoft announced on Oct. 24 that the company had generated revenue of $18.53 billion in the first quarter of its fiscal year 2014, a record for Microsoft. The Redmond, Wash.-based software maker reported net income of $5.24 billion and earnings per share of $0.62, handily beating analyst estimates. Wall Street analysts expected Microsoft, which took a massive $900 million write-off due to the poorly performing Surface tablet in its third quarter, to ring up $17.79 billion in sales and hit an earnings-per-share target of $0.54. Noting that the company is in the midst of a major restructuring effort, Microsoft Chief Financial Officer Amy Hood credited the robust financials to brisk demand for business and strengthening consumer demand. "Our enterprise renewals were very healthy, and our devices and consumer business continued to improve," stated Hood in company remarks. To keep the momentum going, Microsoft is focused on "technological innovation, supply chain management and global cloud operations" by making strategic investments in those areas, she added. In an Oct. 24 conference call, Hood boasted that her company was "taking share in areas like virtualization and data platform [SQL and related tech]." CEO Steve Ballmer, whose time at the helm is growing shorter due to his impending retirement, also struck an optimistic note. "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," he said in a statement.
According to Microsoft, commercial revenue hit $11.2 billion in the fourth quarter, a 10 percent gain over the same year-ago period. Strong performers include SQL Server Premium and the company's commercial cloud offerings, which achieved 30 percent and 103 percent revenue growth, respectively.