News

Microsoft Beats Estimates in Q3 Earnings Report

Microsoft reported diluted earnings per share of $0.68 in its earnings report Thursday for the third quarter of fiscal year 2014, beating the $0.63 expectation of financial analysts.

The Q3 revenue of $20.40 billion essentially met analyst expectations of $20.39 billion.

Microsoft's net income for the quarter was $5.66 billion vs. $6.05 billion in the previous Q3 period. The Q3 period ended on March, 31, 2014.

Microsoft provided some aggregate figures for the company's business segments in its Q3 report. It reported overall "Commercial" revenue of $12.23 billion, up 7% year over year. In addition, Microsoft's "Devices and Consumer" revenue was $8.30 billion, up 12%.

The chart below shows Microsoft's six reporting segments, comparing Q3 2014 results (blue) with results from the same period last year (green).

Microsoft Q3 2014 revenue earnings across segments.

Based on the Q3 report, there were deficits on the "Devices and Consumer Licensing" side (which includes Windows OEM, Windows consumer and Office consumer revenue), as well as on the "Devices and Consumer Other" side. Devices and Consumer Other is a grab bag category that including products such as Windows Store and Xbox Live transactions, search and display advertising, and subscriptions to Office 365 Home and Personal editions, as well as games and other consumer products, according to Microsoft's 10-Q description.

The Q3 revenue figures were affected by revenue from past consumer product deals, including a Windows Upgrade Offer, Office Deferral and Xbox Deferral. However the revenue also took a hit from a $733 million (€561 million) payout to the European Commission for failing to include a browser choice screen on Windows PCs sold in Europe.

Microsoft disclosed some highlights for the quarter on the Commercial side:

  • Windows volume licensing grew 11%
  • Windows Azure growth of 150%
  • Double-digit Exchange, Lync and SharePoint growth
  • Office 365 revenue growth greater than 100%

On the Consumer side, Windows OEM revenue was up 4%. Surface revenue was $500 million, up 50%. Office 365 Home edition now has 4.4 million subscribers. Bing search in the U.S. market was up 18.6%.

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.

Featured

  • World Map Image

    Microsoft Taps Nebius in $17B AI Infrastructure Deal To Alleviate Cloud Strain

    Microsoft has signed a five-year, $17.4 billion agreement with Amsterdam-based Nebius Group to expand its AI computing capabilities through third-party GPU infrastructure.

  • Microsoft Brings Copilot AI Into Viva Engage

    Microsoft 365 Copilot in Viva Engage is now generally available, extending Copilot's AI-powered assistant capabilities deeper into the Viva platform.

  • MIT Finds Only 1 in 20 AI Investments Translate into ROI

    Despite pouring billions into generative AI technologies, 95 percent of businesses have yet to see any measurable return on investment.

  • Report: Cost, Sustainability Drive DaaS Adoption Beyond Remote Work

    Gartner's 2025 Magic Quadrant for Desktop as a Service reveals that while secure remote access remains a key driver of DaaS adoption, a growing number of deployments now focus on broader efficiency goals.