Microsoft Posts Record First Quarter Revenue of $18.53 Billion; $400 Million in Surface Sales

Paul Lilly

Share of Microsoft are up nearly 6 percent after posting Q1 financial results

After taking a $900 million charge on unsold Surface inventory last quarter, Microsoft investors were ready for a bit of good news, and they certainly got it. Kicking off its fiscal year, Microsoft reported record first-quarter revenue of $18.53 billion, resulting in a $5.24 million profit and earnings per share of $0.62. Not too shabby for a company that's in the midst of a transitional phase.

Devices and Consumer revenue grew 4 percent to $7.46 billion, while Commercial revenue jumped 10 percent to $11.2 billion. The Redmond company also said that Surface revenue grew to $400 million, noting sequential growth in revenue and units sold over the prior quarter. That number will likely improve with the launch of Surface 2 and Surface Pro 2.

"Our devices and services transformation is progressing and we are launching a wide range of compelling products and experiences this fall for both business and consumers," said Steve Ballmer , chief executive officer at Microsoft. "Our new commercial services will help us continue to outgrow the enterprise market, and we are seeing lots of consumer excitement for Xbox One, Surface 2 and Surface Pro 2, and the full spectrum of Windows 8.1 and Windows Phone devices."

Despite a very positive quarter, Microsoft said Windows OEM revenue dropped 7 percent year-over-year. In the same breath, Microsoft announced that Windows Pro revenue grew for the second consecutive quarter, but that little tidbit doesn't mask the fact that the PC market is struggling.

Still, Microsoft looks to be on solid ground for the time being, especially if the Xbox One gets off to a hot start next month. Investors seem optimistic too, as they sent the share price of Microsoft up nearly 6 percent after the company revealed its first-quarter figures.

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