Microsoft revenue for the quarter to December rose to USD 26.5 billion from 24.5 billion the year before, with particularly strong growth again from commercial cloud services. Operating profit slipped to USD 7.8 billion from 7.97 billion, and diluted earnings per share went a bit lower to USD 0.71 from 0.78 the year earlier.
The results include USD 243 million worth of integration and restructuring costs, or a USD 0.02 per share negative impact, related to both Microsoft's restructuring plan announced in July and the ongoing integration of the Nokia phone business. There was also a USD 0.04 per share negative impact related to an IRS audit adjustment.
Devices and Consumer revenue grew 8 percent to USD 12.9 billion, led by Surface tablet revenue up 24 percent to USD 1.1 billion. Office 365 Home and Personal subscribers increased to over 9.2 million, up 30 percent from the previous quarter. Search advertising revenue lifted 23 percent, with Bing US market share up 150 basis points from the year before to 19.7 percent. Xbox console sales totaled 6.6 million units, with a strong holiday season performance. Phone Hardware revenue reached USD 2.3 billion, with 10.5 million Lumia units sold.
Windows OEM Pro revenue declined 13 percent, impacted by the business PC market and Pro mix returning to pre-Windows XP end of support levels and by new lower-priced licenses for devices sold to academic customers. Windows OEM non-Pro revenue fell 13 percent, with license growth from opening price point devices.
Commercial revenue grew 5 percent to USD 13.3 billion, driven by commercial cloud revenue surging 114 percent from the year before, with an annualised revenue run rate of USD 5.5 billion. Office Commercial products and services revenue went 1 percent lower, with transactional revenue affected by the continued transition to Office 365 and declines in commercial PCs following the XP refresh cycle. Server products and services revenue grew 9 percent, with double-digit growth of SQL Server and System Center. Windows volume licensing revenue increased by 3 percent.
