Microsoft announced their numbers for the fiscal first quarter 2017 on Thursday, showing earnings of $4.9 billion on revenues of $22.3 billion, aided in part by a strong showing by their Surface lineup of computers.
According to Microsoft’s official numbers, Surface revenue came in at $926 million, up 38 percent compared to the same time last year. The surge for the quarter ending in September was largely due to a positive mix of premium devices sold, specifically top-tier Surface Book and Surface Pro 4 models.
Microsoft reported:
- Revenue was $20.5 billion GAAP, and $22.3 billion non-GAAP
- Operating income was $5.2 billion GAAP, and $7.1 billion non-GAAP
- Net income was $4.7 billion GAAP, and $6.0 billion non-GAAP
- Diluted earnings per share was $0.60 GAAP, and $0.76 non-GAAP
The Redmond firm’s CEO, Satya Nadella told listeners on the Microsoft earnings conference call that the company saw a 70% year-over-year increase in commercial deployments of 500 Surface devices or more. The company did not reveal total unit sales for the devices.
The Surface helped Microsoft overcome a sizeable $493 million decline in overall device revenue due to the firm’s Windows Phone segment being down $799 million, or 72%, year-over-year as the firm is phasing out its handsets properties. Nadella also noted the company is expecting Surface revenue to decline, as the most recent product versions near the one-year anniversary of their launch.
The strong numbers for the Surface come as Apple continues to see sales of its venerable iPad continue a steady slide. iPad sales were 10 million units during the June quarter, down 7% year-over-year. However, revenues increased by 9%, due to customers’ affinity for models in the iPad Pro lineup.
AppleInsider notes that, although Microsoft Surface sales are increasing, Apple still leads in marketshare, unit sales, and derived income.
Apple will announce its earnings for the fiscal fourth quarter of 2016 next Tuesday. Apple CEO Tim Cook and CFO Luca Maestri are expected to discuss the state of the iPad on a conference call that same day, immediately following the release of the Q4 2016 numbers. MacTrast will supply coverage of the earnings report.
