Microsoft sees profit boost on back of Xbox One and cloud success

Microsoft HQ
Diversity pays off for Microsoft

Microsoft has delivered a larger-than-expected profit for the quarter ending December 31, credited to the high demand for its Office software and the newly released Xbox One.

Shares of the Redmond company rose by 3.4 per cent after Microsoft reported an overall net profit of $6.56 billion (£3.95 billion, or AU$7.57 billion) for the second quarter, with overall revenue rising to $24.5 billion (£14.7 billion, AU$28.1 billion).

"We significantly outpaced enterprise IT spending as we continue to take share from our competitors while customers transition to the cloud," said Microsoft chief operating office Kevin Turner. The company said revenue from its commercial cloud services mode than doubled during the period.

Encouraging figures

The company reported that revenue in its commercial segment jumped by 10 per cent to 12.67 billion (£7.6 billion, or AU$14.6 billion). Microsoft's SQL and System Centre unit experienced growth into the double-digits and Office 365 and Azure customer bases rose by as much as 100 per cent.

The Devices and Consumer division of Microsoft saw a 13 per cent boost, while revenue from the company's Surface tablets rose to $893 million (£537 million, $1 billion) from $400 million (£241 million, AU$459 million) in the previous quarter.

Estimates from the tablets' prices, however, indicate the company may have only sold two million units while Apple, by comparison, is expected to announce the sales of 20 million iPads for the holiday quarter.

The Xbox One, launched in November 2013, contributed more than half of the 7.4 million unit sales from the quarter, up from 5.9 million a year ago.

This quarter may be the last for CEO Steve Ballmer, with Microsoft still looking for his replacement after he announced his imminent retirement in August 2013.