Home > Hardware > Microsoft Shares Jump 4%, PCs & Xbox Flat, Surface Up 12%

Microsoft Shares Jump 4%, PCs & Xbox Flat, Surface Up 12%

Microsoft has posted a stellar Q1FY18 earnings report, beating analyst forecasts, and propelling its shares 4% higher in after-hours trading – its PC division inclusive of Xbox, however, has remained largely flat.

The tech giant notched revenues of US$24.5 billion, beating analysts expectations for US$23.56 billion. The company also beat expectations for US$0.72 earnings per share, notching US$0.84 instead.

Concerning Microsoft’s More Personal Computing division – which includes its Surface PC, Windows and Xbox businesses – performance was relatively flat compared to the previous period last year.

The division notched $US9.4 billion in revenue.

Microsoft states revenues from Surface hardware jumped 12% from last year – it follows a decrease the previous quarter. The figures come after the release of its Surface Laptop in June this year.


[Surface Laptop]

Licensing of Windows to other third-party PC manufacturers climbed 4%.

Microsoft’s Xbox business remained largely flat, only rising 1% – the fall in gaming hardware revenue was offset by an increase in Xbox software and services revenue. The company also recently dropped the price of its Xbox One console.

As per previous years, the tech giant did not disclose official unit sales figures for its gaming console Xbox.

Microsoft notched gaming revenues of US$1.9 million.

The company is currently preparing for the launch of its Xbox One X console on November 7th.

As its latest earnings report reflects, the real winners for the company have been its Productivity and Business Processes division – which includes its Office 365 business (up 42%), LinkedIn, and Dynamics (up 69%) – which overall notched a sizable year-on-year increase of 28%, reaching US$8.2 billion.

Demand for Office 365 has reportedly surpassed Microsoft’s expectations. The company states it added 1 million Office 365 consumer subscribers in the past quarter, from 27 million to 28 million.

Analysts state that the commercial growth of Office 365 will, however, continue to outpace the decline of the transactional Office business.

The company surpasses its goal of $20 billion annual revenue for its cloud computing business, as celebrated by Microsoft Chief Executive, Satya Nadella:

“This quarter we exceeded $20 billion in commercial cloud ARR, outpacing the goal we set just over two years ago”

“Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform”.

Concerning its outlook for the future, Microsoft expects to report US$27.8 billion – US$28.6 billion in revenue for Q2FY18.

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