Microsoft pleases Wall Street with earnings, closes Nokia deal

Last quarter was a good one for Microsoft. The company posted its earnings after the bell yesterday, reporting revenue growth "across segments" and, according to Reuters, beating Wall Street's estimates. After-hours trading brought the company's stock price to "levels not seen since the turn-of-the-century Internet stock boom," Reuters says.

Here are the numbers for Microsoft as a whole. For reference, the results correspond to the third quarter of Microsoft's 2014 fiscal year. That quarter ended on March 31.

  Q3 FY'14 Q2 FY'14 Q3 FY'13
Revenue $20.40 billion $24.52 billion $20.49 billion
Net income $5.66 billion $6.56 billion $6.06 billion

Where's the growth? Well, you'll have to check the non-GAAP numbers in Microsoft's earnings release to see it. Apparently, the numbers for the year-ago quarter were padded with deferred revenue from, among other things, Windows and Office upgrades. Excluding those deferred figures, Q3 FY'13 revenue was $18.83 billion, and operating income was $6.69 billion, less than the $6.97 billion Microsoft posted for Q3 FY'14.

Anyway, here's the revenue data for Microsoft's individual businesses:

  Q3 FY'14 Q3 FY'13
Devices and Consumer Licensing $4.38 billion $4.35 billion
Devices and Consumer Hardware $1.97 billion $1.40 billion
Devices and Consumer Other $1.95 billion $1.66 billion
Commercial Licensing $10.32 billion $9.98 billion
Commercial Other $1.90 billion $1.45 billion
Corporate and Other -$127 million $1.65 billion

Microsoft says revenue for its Devices and Consumer businesses grew by 12% overall, while revenue from its Commercial businesses climbed by 7%. The Devices and Consumer growth can be attributed to revenue gains from Windows OEM licenses, Office 365 Home subscriptions, Xbox consoles, Surface tablets, and somewhat surprisingly, Bing search advertising.

Microsoft CEO Satya Nadella comments in the earnings announcement, "We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth."

In related news, Microsoft completed its acquisition of Nokia's Devices and Services business this morning. Former Nokia CEO Stephen Elop is now in charge of Microsoft's Devices Group, "overseeing an expanded devices business that includes Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories." In all, it looks like around 25,000 new employees have joined Microsoft's payroll.

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