Boosted by consumer sales, Microsoft beats forecasts

The world’s largest software firm has beaten expectations for the last quarter of 2013.

Boosted by strong software sales and business services, Microsoft reported a net income of USD 6.56 billion for the October-to-December quarter.

This is up from the USD 6.38 billion income reported last year.

Its earnings were boosted by a strong performance during the holiday season for sales of its new Xbox console and Surface tablets.

(Yet in spite of the fact that Surface tablets sales totaled USD 893 million, they are yet to make a profit.)

Undercutting the cloud

In addition, Microsoft also saw a strong performance from its cloud services division; intimately linked with price lowering to undercut its competitors.

Sales of Microsoft’s cloud programs – including products such as Office 365 and Azure – doubled sales in the last quarter of 2013 from 2012.

Last year, the company reported it would be keeping its prices in line with Amazon, specifically Amazon Web Services (AWS), the online retailer’s storage services division.

In light of this, after AWS decreased its costs to consumers last week, a Microsoft blog post on the 24th of January confirmed the software giant would follow suit.

Steven Martin, the General Manager of Business Planning and Strategy within the cloud division, also confirmed the company is “making the new prices effective worldwide, which means that Azure storage will be less expensive than AWS in many regions.”

This may enable the company to gain a slight lead on the storage market.

Overall figures

Overall, the firm’s revenue totalled USD 24.5 billion – marking a 14% increase over the quarter.

Upon the news breaking, its shares rose to nearly 4% during after-hours trading.

The figures were boosted by Xbox sales totalling over 7.4 million – up from 5.9 million units sold the year before.

Launched in November the new Xbox One contributed heavily to the company’s top line – selling over half of the overall Xbox sales in the Q4 2013.

Leaving note

Chief Executive Steve Ballmer announced in August 2013 that he would be leaving the company within 12 months.

Yet no mention was made of a replacement in the results report issued by the company.

Sources have stated Microsoft has looked over both internal and external candidates, and have whittled the search down to a handful of hopefuls.

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