Microsoft’s Q2 Results Exceed Expectations by Nearly $1 Billion
After CES wrapped this month, tech sites and bloggers started talking about how the lack of Windows-focused products signified the beginning of the end for Microsoft and its flagship operating system—though, I disagreed. Today, the company released its Q2 fiscal results (for the quarter ending December 31) and revealed that Microsoft has had a hell of a holiday season, with Surface 2 and Xbox One sales bringing in a nice amount of cash, and exceeding revenue projections by almost a billion dollars. Sure, once you’re talking about billions of dollars, one billion isn’t all that impressive—until you remember that that’s still a million millions.
The second quarter brought in $24.5 billion, while this post on Bloomberg reports that the company’s projected revenues for the quarter were pegged at $23.7 billion. Even more impressive, Microsoft made $22 billion during the same time in 2012. And the “Devices” division pulled in 13 percent more revenue over the previous year, with a grand total of $11.91 billion.
The reason, as stated above, can easily be found in boosted Surface sales—doubling from Q1 to Q2 with $400 million to $893 million in revenue—and the launch of the Xbox One in November, 3.9 million of which were sold in only a month on the market. That figure is almost a million more units than what had been reported on January 6, leaving me a little curious as to the discrepancy.
Now, it’s important to note that these two major hardware SKUs were clearly part of the big holiday surge, and that the revenues next year may fail to post the same kind of numbers. On the flip-side, the Xbox One may enjoy even more revenue as a year’s worth of games will be out by then, and more consumers may be ready to take the next-gen plunge with Microsoft.
Another important note: this post on CNET reports that Microsoft’s licensing business declined by six percent, reflecting the dropping numbers of PC sales that come with Windows and Microsoft’s other software packages. That means that the company has absolutely made the right move by putting out its own piece of proprietary hardware that makes the most of Windows 8’s strengths and brings revenue and interest to the Microsoft directly. The same goes for its acquisition of Nokia’s devices division, meaning it’ll take charge of the making its own Windows phones. Taking a page out of Apple’s book may smack of imitation, but the end result means that the company is repositioning itself to weather the storm of the declining PC market and the rising tablet and smartphone sectors.
And before 2014 is out, hopefully, Microsoft will have its new CEO in place and steering the company in whatever new direction that entails. In short, no matter what you do or don’t see at CES, don’t count Microsoft out yet.