Windows 8.1, Surface and Xbox One help lift Microsoft to $300bn valuation

All is not that bad in Redmond after all

TODO alt text

Once more, Microsoft has proved industry analysts wrong by posting revenues of just over US$18.5bn (about £11.4bn, AU$19.3bn) and earnings per share (EPS) of $0.62 (about £0.38, AU$ 0.65) for the first quarter of the company's 2014. That's respectively 4.1% and 15% than the expert consensus amongst the financial community.

Net income stood at $5.24bn (£3.24bn, AU$ 5.47bn) while operating income reached $6.33bn (£3.91bn, AU$ 6.6bn). The surprising numbers caused Microsoft's share price to jump by more than 7%, pushing the company's valuation to just over $300bn (£186bn, AU$ 314bn), still less than Google or Apple.

Perhaps more importantly, Microsoft's cash reserves now stand at more than $80bn (£50bn, AU$ 83.4bn), probably more than Google and Apple combined.

Are worries over?

The earning reports are the first since Steve Ballmer announced he will be leaving the company and come amidst a flurry of major products & services launches. Over the last quarter, Microsoft announced the acquisition of Nokia Devices and Business division, Xbox One, Surface 2 and Surface Pro 2 as well as a refreshed Windows 8.1.

The only worrying sign amidst a swathe of good news (including a $400m revenue bonanza from the berated Surface) is the fact Windows OEM revenue declined by 7%, although Windows Pro revenue (which includes Windows 7 and Windows 8, presumably) grew for the second consecutive quarter.

It is the commercial side of the business however that helped Microsoft keep its winning ways. Double digit growth in SQL server revenue combined with more than 100% growth in the cloud segment pushed the commercial revenue to a whopping $11.2bn (£6.92bn, AU$ 11.68bn).

  • Microsoft has just released a new version of its flagship tablets and you can check our hands on reviews of the Surface 2 (née RT) and Surface Pro 2.