Microsoft Q2 Earnings Reveal $26.5 Billion In Revenue

Final quarter earnings are always interesting, and for Microsoft the second quarter earnings brought in a mixed bag in terms of numbers and strategy. A really mixed bag at that.

The uplift provided by the retirement of Windows XP seems to have waned a bit.

Sure, the technology titan reported a total revenue of $26.5 billion, with $7.8 billion income and a net income of $5.86 billion. That is for the final three months of 2014, which corresponds to Q2 for Microsoft in their fiscal year.

Revenue was up a solid 8% compared to last year, though operating income was down by 2%.

In terms of pluses, the Surface business broke through the billion dollar ceiling. The division reported $1.1 billion in revenue. This is up by a notable 24% — no doubt driven by the Surface Pro 3 and its variety of accessories.

Office 365 Home and Personal subscribers increased to 9.21 million, a surge of 30%.

But the company’s phone division brought in only $2.3 billion, even though worldwide sales of Lumia handsets topped 10.5 million in these three months. Windows Phone revenue dipped by 61%, and that’s partly due to the focus on low end and the termination of the Nokia deal of $650 million.

Equally worrying are figures of the Windows division.

Operating system declined significantly in this past quarter, due to a lot of people and businesses having migrated from Windows XP and the overall general slowdown of the PC market.

Declines in these two areas and the slowness of the gaming division are offset by positive developments in future products from the company — things like Windows 10, HoloLens and the Surface Hub have raked up encouraging optimism from the public.

Microsoft may have missed the mark in the short term, with numbers some 7 cents less than what was expected, but there is enough confidence in the long term for Redmond.

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