Microsoft financial results: Surface and Lumia sales continue to rise

In Microsoft they have just published the company's financial results for the third quarter of the fiscal year 2015, which ended on March 31st. They reveal that its revenue increased by 6% to $21.7 billion (compared to the same quarter last year), which however has resulted in a reduction in net profityear on year of 12%, leaving these at 4,980 million dollars.

But as always, these aggregate figures hide important differences between each divisionOverall, the breakdown of the results shows that Microsoft continues to make progress in its transition to being a cloud services company, rather than one dedicated to selling of licenses. Let's take a look at the historical figures, and the data broken down by division and product type.

Lumia

The Phone Hardware division registers sales this quarter of 8.6 million Lumia smartphones Although this means a setback compared to the quarter immediately previous (in which 10.5 million phones were sold), this would be due to the seasonality of the sales of the market as a whole, so the valid comparison is against the same quarter of the previous year, with respect to the which sales increase by 18%

SALES AND INCOME BY LUMIA DEVICES | Create infographics

In turn, Microsoft Mobile sold 24.7 million feature phones or basic phones, which implies a decrease compared to the same period of the previous year. In total, the division registers net losses of 4 million dollars during this quarter, which is mainly explained by the lower margins delivered by the sale of low-end equipment, on which Microsoft has focused in recent months, by type less favorable exchange rates (dollar appreciation), together with 190 million dollars that the company has had to spend to finalize the integration of the former division of Nokia devices

Even so, Redmond has made $805 million in net profit from phone sales if you count the entire period that this division has been under its control.

Surface and Xbox

Under the item Computing and Gaming Hardware , which includes the Xbox console and Surface hybrid tablets, registered an income of 1800 million dollars (down 4% compared to the same period of the previous year), which corresponds to a net profit of 410 million dollars, the which represents a 60% increase compared to the same quarter of 2014.

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Microsoft also reports revenue and profit figures that correct for the effect of the appreciating dollar, which makes money generated by Redmond abroad worth less> than profits would have increased by 92%."

SURFACE | Create infographics

An interesting thing to see in this division is that the positive results are driven primarily by sales of the Surface Pro 3, which register a year-on-year increase of 44%, reaching 713 million dollars.

For its part, revenue from sales of Xbox decreased by 24%, although this was mainly due to the reduction in the sales price of consoles, rather than a drop in units sold. Regarding the latter, we can only speculate, since Microsoft does not report the number of Xbox One or Xbox 360 sold during the quarter.

Windows and Office licenses go backwards, to make way for cloud services

This is where one of the most interesting changes is observed, and that defines what is being the transition towards ">Windows and Office licenses represent a dwindling fraction of total company revenue.In particular, Windows Pro license revenue was down 19%, and regular license revenue was down 26 %, the latter drop being due to lower sales by PC manufacturers.

Meanwhile, Office license sales to consumers are down more steeply, at 41%, mainly because here Microsoft is actively promoting the transition to a cloud-based alternative: Office 365 This transition, as we said, is being largely successful. An example of this is that the number of subscriptions to Office 365 for consumers increased to 12.4 million, which implies a growth of 35% compared to the previous quarter (not year by year).

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But what&39;s even more impressive is the growth of Redmond&39;s commercial cloud, which includes services like Office 365 itself , Azure and Dynamics CRM Online, reporting annual revenue growth of 106% (or 111% if adjusted for dollar appreciation), generating$6.3 billion revenueEven Bing plays its part in this bonanza of online services, increasing its revenue by 21% compared to the same quarter of 2014."

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All these changes are relevant because they lead to Microsoft&39;s financial results becoming uncoupled> (variable that until a few years ago was the main determinant of the company&39;s profits) , showing all the renewing power of the Mobile first, Cloud first vision that Satya Nadella has been driving since he took over as CEO."

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