Microsoft Reports Strong Quarter, No New CEO

Thanks to strong sales of its Surface tablet and new Xbox game console, Microsoft saw profit rise 3% during the quarter ended December 31, 2013.

Beating analysts' expectations, the software giant reported a fiscal second-quarter profit of $6.56 billion -- up from $6.38 billion during the same period a year ago.

“We had a very good quarter,” Amy Hood, Microsoft's chief financial officer, said during an earnings call on Thursday night. “We exceeded expected revenue growth.”

Surface revenue more than doubled sequentially, from $400 million in the first quarter to $893 million in the second quarter.

Overall, sales rose 14% to $24.5 billion, boosted by higher sales of Office, Xbox, and new Surface tablets. 

Devices and consumer revenue grew 13% to $11.91 billion during the quarter, Bing search share grew to 18.2%, and search-advertising revenue grew 34%.



The company sold 7.4 million Xbox console units into the retail channel, including 3.9 million Xbox One consoles and 3.5 million Xbox 360 consoles. Windows OEM revenue declined 3%, reflecting strong 12% growth in Windows OEM Pro revenue -- offset by continued softness in the consumer PC market.Commercial cloud services revenue more than doubled, while Office 365 commercial seats and Azure customers both grew triple-digits.

Hood on Thursday said she expected Microsoft’s acquisition of Nokia to close this quarter.

Looking ahead, Hood said to “expect similar macro dynamics” to impact Microsoft's core businesses as it continues to transition to a devices and services company.

Microsoft did not address its ongoing CEO search on Thursday. This past August, CEO Steve Ballmer said he would retire within a year.

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