Despite an unclear mobile strategy and a shifting software industry, Microsoft still managed to post better-than-expected earnings on Thursday.
For the quarter ended September 30, 2014, the software giant reported revenue of $23.20 billion -- which was up 25% year-over-year -- while diluted earnings per share were $0.54 per share.
“We’re off to a great start to the year,” CEO Satya Nadella told investors on Thursday.
The financial results included $1.14 billion of integration and restructuring expenses related to Microsoft’s restructuring plan, and its ongoing integration of the Nokia Devices and Services business.
Devices and consumer revenue grew 47% to $10.96 billion, during the period, while commercial revenue grew 10% to $12.28 billion.
Since the launch of the Xbox One in 28 new markets, Microsoft has increased console unit sales from a year ago, and grew users of Xbox Live apps by more than 20%.
Microsoft was widely believed to have reconsidered its mission to market Xbox One as a centralized entertainment system. This past quarter, however, the company continued to add multimedia features to the console, including a streaming feature for users to watch TV on a Windows, iOS or Android phone or tablet using a SmartGlass app on a home network.
Last month, Microsoft also agreed to buy Minecraft maker Mojang for $2.5 billion. "The acquisition of Mojang, which we expect to close in November, extends our ecosystem and community across multiple platforms,” Nadella said on Thursday. “Minecraft adds to our … portfolio of first-party games and content such as Halo, and will strengthen our gaming experiences … as well as cross-platform monetization.”
Beating Apple to the punch, meanwhile, Microsoft is reportedly planning to release its first “wearable” in a matter of weeks. The company is also firming up plans to open a Manhattan flagship store on Fifth Avenue. On Thursday, however, company executives made no mention of a forthcoming smartwatch, or the retail effort.
Going forward, Microsoft is “accelerating the pace of decision-making and taking decisive actions to improve how we operate,” Amy Hood, the company’s chief financial officer, said on Thursday’s earnings call.
“This approach is reflected in the progress we’ve made in restructuring the company and integrating our phone business,” Hood said. “As a result, we incurred charges of $1.1 billion this quarter.”
As for Bing, revenue was driven by both volume and rate growth, according to Hood. “We again delivered double-digit monetization gains, driven by investments in core relevance and ranking algorithms,” she said. “These improvements keep us on the path to Bing profitability in fiscal .”
What about Microsoft’s online advertising business? Well, “consistent with prior quarters, display revenue remained under pressure,” Hood said.