Microsoft sales of Surface double as earnings beat expectations


As the tenure of Microsoft Chief Executive Steve Ballmer winds down, the company delivered a surprise of the pleasant kind on Thursday when its second quarter earnings came in stronger than expected.

Among the more notable items, the company said sales of its troubled Surface tablet doubled to $893 million from $400 million in the first quarter.

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The company launched the tablet more than a year ago to lukewarm reviews and had to take an embarrassing $900-million write-down last summer because so few sold.

Last fall, the company introduced the Surface 2 to address some of the criticism. And for the moment, it seems to be paying off as sales of consumer products and devices overall grew 13% to $11.91 billion.

Microsoft also said it sold 7.4 million Xbox consoles last quarter, including 3.9 million Xbox One consoles that it just introduced last fall. Bing also saw its share of searches increase to 18.2%, the company said.

Overall, the company reported revenue of $24.52 billion in the second quarter, up from $21.5 billion for the same quarter one year ago. Analysts had expected revenue of $23.68 billion, according to Thomson Reuters. The company’s commercial revenue grew 10% to $12.67 billion.

“Our Commercial segment continues to outpace the overall market, and our Devices and Consumer segment had a great holiday quarter,” Ballmer said in a news release. “The investments we are making in devices and services that deliver high-value experiences to our customers, and the work we are doing with our partners, are driving strong results and positioning us well for long-term growth.”

The company reported 78 cents earnings per share, which also topped analyst expectations of 68 cents.


Microsoft is scheduled to hold a conference call Thursday afternoon to discuss earnings. Investors will also be hoping for an update on a search for a new CEO to replace Ballmer, who had previously said he would step down some time this year.


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