Channel NewsAsia

Microsoft tops expectations with record revenue

Microsoft soared to record revenues in the last quarter the company said Thursday, confounding Wall Street forecasts on the back of strong demand for Xbox consoles, Surface tablets and Internet "cloud" services.

SAN FRANCISCO: Microsoft soared to record revenues in the last quarter the company said Thursday, confounding Wall Street forecasts on the back of strong demand for Xbox consoles, Surface tablets and Internet "cloud" services.

The US-based technology titan reported net income of US$6.56 billion on revenue that hit a record high of US$24.52 billion in the quarter that ended December 31.

"Our Commercial segment continues to outpace the overall market, and our Devices and Consumer segment had a great holiday quarter," said outgoing chief executive Steve Ballmer.

Microsoft shares climbed more than three per cent to US$37.25 in after-market trades on the Nasdaq following release of the earnings figures.

"We delivered record revenue as demand for our business offerings remains high and we made strong progress in our Devices and Consumer segment," Microsoft chief financial officer Amy Hood said in the earnings release.

Sales of Surface tablets more than doubled from the previous quarter to hit US$893 million, and Microsoft sold 7.4 million Xbox videogame consoles, with 3.9 million of those being new-generation Xbox One.

Bing's share of the Internet search market grew to 18.2 per cent while its share of the online search ad market grew about a third, according to Microsoft.

Meanwhile, money made from selling Windows software to computer makers slid by three per cent due to continue soft demand by consumers for personal computers, according to Microsoft.

Microsoft built its empire on packaged computer software but has been under pressure to adapt to lifestyles revolving around mobile devices and programs offered as services hosted as services in the Internet "cloud."

Microsoft reported that cloud services to businesses and consumers posted strong growth.

Ballmer late last year unexpectedly announced he is stepping down to clear the way for a successor who will help the company reinvent itself for the mobile Internet Age.

"Unless you're constantly inventing something new, you're old and tired," Ballmer said at a conference in Rome in December. "Today we're having to remake ourselves."

Microsoft has indicated that the hunt for a new chief executive should be over early this year.

Analysts eagerly awaiting word of who Ballmer's successor with are also watching to see how active co-founder and board member Bill Gates will be in running the company.

Ballmer was a classmate and friend of Gates from their days at Harvard University in the 1970s.

He took over from Gates in 2000 but said he will step down by August 2014.

When Ballmer took over, Microsoft was the undisputed tech sector leader, and the world's largest company in market value. But in recent years its core business has been shaken as consumers began to move from desktop and laptop PCs to mobile devices.

Tweet Photos, Videos and Update on this Story to  #cna