Microsoft has reported quarter results for fiscal Q2 2014, posting record earnings that surged on the back of strong Xbox One and Surface sales.
On Friday, January 23, Microsoft posted financial results for the quarter ended December 31, 2013, and reported net income of $6.56 billion, or 78 cents per share, compared to net income of $6.38 billion, or 76 cents per share, in the year ago period.
The software giant also revealed that revenue rose 14 percent to $24.52 billion, which exceeded analysts' estimate of $23.68 billion.
"We delivered record revenue as demand for our business offerings remains high and we made strong progress in our Devices and Consumer segment," said Amy Hood, chief financial officer at Microsoft. "These results reflect our focus on execution, cost discipline, and long-term shareholder value as we continue to drive the strategic transformation of the company."
Microsoft launched the much-awaited Xbox One gaming console and the second-generation of the Surface tablets in the quarter, which helped the company boost its sales.
"Our Commercial segment continues to outpace the overall market, and our Devices and Consumer segment had a great holiday quarter," said Steve Ballmer, chief executive officer at Microsoft. "The investments we are making in devices and services that deliver high-value experiences to our customers, and the work we are doing with our partners, are driving strong results and positioning us well for long-term growth."
The company reported that revenue of the devices and consumer hardware unit, which includes Xboxes and Surface tablets, increased 68 percent to $4.73 billion, which topped analysts' prediction of $4.05 billion.
Microsoft shipped over 7.4 million Xbox consoles to retailers, which included 3.9 million Xbox One units in the quarter ended December 31. The latest gaming console was the top seller in the U.S. in December 2013.
The company also revealed that devices and consumer licensing revenue, which includes Windows and Windows Phone software, fell 5.6 percent to $5.38 billion. However, analysts had estimated revenue of $5.28 billion on average.
Commercial licensing revenue, or server software and corporate versions of Windows and Office, also rose to $10.9 billion, higher that analysts' forecast of $10.8 billion. Surface sales for the quarter amounted to $893 million, topping an estimated sale of $260 millon made by Heather Bellini, an analyst at Goldman Sachs.
Microsoft shares rose as much as 5.5 percent in extended trading following the earnings call on Thursday. On Friday afternoon, the shares were trading up 2.56 percent at $36.98 on the Nasdaq.