Flying straight in the face of another lackluster overall Tech industry earnings season, Microsoft Corp. (MSFT - Analyst Report) just posted a big beat on earnings in its fiscal Q2 2014 (ended December). Earnings of 78 cents per share came from $23.7 billion in sales for the quarter. The revenue figure is basically in-line with the Zacks Consensus Estimate of $23.68 billion, but the earnings number is a 14.7% positive surprise.
This is the best performance for Microsoft in at least the last four quarters. Earnings beats, when they've come, have tended to be on the modest side. Also, analysts had been downwardly revising estimates throughout the quarter, with a consensus of 68 cents having come down from 75 cents early in Q2. And with Nokia's (NOK - Analyst Report) announcement earlier today that its Windows-based Lumia phone sales were down over the holiday season, investors may have been a tad wary about Microsoft's numbers after the bell today.
In regular Thursday trading, MSFT shares rose slightly, but are up 3% in the after-market. The stock is now within a couple bucks of its 52-week high.
Revenues for its Surface tablet fared notably well, bringing in $893 million in revenues for Microsoft's holiday quarter. CEO (for now) Steve Ballmer also cited a favorable enterprise business, while pointing to a 13% gain in Devices and Consumer. Commercial revenue was up 10% in the quarter.
Of course, plenty of questions remain for the world's biggest software firm: Ballmer will be retiring sometime this year, there is still a $7.2 billion matter of buying all of Nokia's smartphones and tablets business, and can Surface continue its sales pace and take market share from its tablet competitors? These shall no doubt be addressed during the company's conference call.
For now, though, with other big tech firms like IBM (IBM - Analyst Report) and Intel (INTC - Analyst Report) coming out with disappointing earnings numbers this season so far, it's nice to see one of the big players finally gaining some traction on their own terms.