Microsoft releases 1Q15 earnings

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Microsoft’s 1Q15 results

On October 23, 2014, Microsoft Corporation (MSFT) released its 1Q15 earnings. The company’s revenues and non-generally accepted accounting principles (or non-GAAP) and earnings per share (or EPS) were $23.20 billion and 54 cents per share, respectively. Microsoft beat the analysts’ expectations on both revenue and EPS fronts, which were $22.01 billion and 49 cents per share, respectively.

revenue by segments
Operating performance

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Devices and Consumers revenues grew to $10.96 billion, while commercial revenue stood at $12.28 billion. Both the segments posted good growth. As the above chart shows, commercial revenue contributes majorly to the overall revenues. The Devices segment registered a growth of 47% on account of the Nokia acquisition. Its commercial segment grew at 10% on account of good growth in its commercial cloud and office 365 offerings.

EPS marred by restructuring and acquisition charges

Although earnings per share (or EPS) did beat analysts’ expectations, it declined on a year-over-year (or YoY) basis. The 1Q15 EPS included 11 cents per share of items due to the Microsoft’s restructuring plan and the Nokia acquisition. In Q1 2014, EPS stood at 62 cents per share. Since the announcement of 1Q15 results, Microsoft’s stock experienced a surge of ~5% on account of its good performance in 1Q15. The effect appears to be more pronounced as other leading technology players such as IBM Corp. (IBM), SAP AG (SAP), EMC Corporation (EMC), and Oracle (ORCL) are reeling with the transition to cloud. As a leading technology player and member of the Dow Jones Industrial Average (or DJIA), Microsoft has significant market influence on the technology industry.

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