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Microsoft outpaces expectations, boosted by surge in Office 365 subscriptions

Despite uncertainty in the PC market, Microsoft's cloud and enterprise services divisions continued to perform well and make up for losses in the PC market.
By Ananth Baliga   |   April 24, 2014 at 5:18 PM   |   Comments

REDMOND, Calif., April 24 (UPI) -- Microsoft posted better than expected fiscal third quarter results, buoyed by strong Office 365 subscriptions and the performance of its enterprise unit.

The tech company reported $20.4 billion in revenues and $7 billion or 68 cents per share in profits. Analysts has estimated $20.4 billion in revenues and a profit of $5.3 billion or 63 cents per share. The better than expected results sent Microsoft shares up in after-hours trading.

The results were the first under the leadership of CEO Satya Nadella and offered a mixed bag -- with Microsoft's cloud services doing very well, while the company's flagship software Windows was a little dull on account of the shakiness in the PC market.

This is also the last quarter before before Nokia is added to Microsoft's revenue mix, with analysts expecting Nokia to lower Microsoft's profit margins and earnings.

Microsoft's enterprise business, known as commercial licensing, delivered as per expectations, with a revenue of $10.32 billion, up from $9.98 billion a year ago.

On the commercial side, server product revenue was up 10 percent, SQL Server sales jumped more than 15 percent and Windows volume licensing revenue was up 11 percent from a year ago.

Nadella said that the results "demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world."

Nadella, who took over in February, has said that his mission is to turn the software giant into a devices and services company.

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