Microsoft Corporation (NASDAQ:MSFT) In Driver’s Seat

Posted by Steve Raasch October 25, 2013 0 Comment 1080 views

Microsoft Corporation (NASDAQ:MSFT) successfully joined the league of tech companies that have beaten the earnings estimates for the latest quarter. Thanks profound sales of Office and server software to businesses that enabled Microsoft to post better than expected revenue and profit for the 1Q14 ended September 30, 2013. Analysts haven’t expected much from Microsoft given the considerable decline in its personal computer sales, hefty acquisition of Nokia Corporation (ADR) (NYSE:NOK)’s handset business and ambitious reorganization initiative launched by soon to retire Chief Executive Officer Steve Ballmer.

The company reported revenue of $18.5 billion for 1Q14 which suggests over 15.6% increase from the revenue of $16 billion reported for 1Q13. Analysts had anticipated revenue of $17.8 billion, on average. Most of the contribution came from sales of Office and server software which aided 10% growth in commercial side revenue. Continued poor performance of Windows system given the dragging sales of personal computers, the hardware group grew modestly, contributing 4% revenue growth.  The profit increased by 17% to $5.2 billion ($0.62 per share) for the 1Q14 compared to $4.5 billion ($0.53 per share) during 1Q13. Microsoft’s profit significantly beat the street expectation of $0.54 per share, on average.

The Chief Financial Officer at Microsoft Corporation, Amy Hood issued the most detailed financial guidance for the first time in several years with revenue forecast of $23.1 billion to $24.1 billion for 2Q14, above the analysts’ average forecast of $22.9 billion. Meanwhile Amy also added that the company will provide an update to the EPS impact (if any), following the closing of pending acquisition of all of Nokia’s devices and services business which is excepted to be completed in third quarter of the fiscal 2014.

Amy mentioned that during the 2Q14 the enterprise business is expected to remain strong and the company is also positioned well to take advantage of the crucial holiday season with launch of Surface, Xbox One and many other devices from its partners. The company will also be launching exciting mobile devices including the Nokia Lumia 1520 tablet and Nokia Lumia 2520 with LTE.

About Steve Raasch

Steve Raasch is a breaking news reporter for GDP insider. During his nearly two decades of editorial experience, Steve has covered a variety of topics including small business, health, personal finance, advertising, workplace issues and consumer behavior. Steve is very passionate about his work. Steve earned a master of arts degree in international relations from the Johns Hopkins University School of Advanced International Studies in Washington.

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