Microsoft earnings show Xbox, Lumia down, but Surface way up

Microsoft’s financial report for the first three months of 2015 show an increase in revenue, but a significant fall in net profit.

The company brought in $21.7 billion in revenue in January, February and March, which is up 6 per cent on this time last year. However, the $4.8bn net income reflects a fall of 12 per cent on the 2014 figure.

The good news for Microsoft is the Surface Pro 3 device continues to be a strong performer for Satya Nadella’s charges. The Surface-based revenue stream amounted to $713m, which is a considerable 44 per cent up on the quarterly earnings for the same period of 2014.

That shows what an impact the third generation Surface Pro 3 has had compared to the underwhelming initial forays into hardware. Of course, Microsoft doesn’t go into sales specifics, but the increase in revenue is a great sign the product is selling well.

Elsewhere for Microsoft’s other hardware divisions, the numbers were less promising. Xbox income is down almost a quarter, 24 per cent, from this time last year following the busy Christmas period and the continuing Xbox One price cuts.

Read more: Xbox One vs PS4

There’s also mixed news on the Lumia Windows Phone front. The firm sold 8.6m devices during the January-March period, which is up 18 per cent on 2014, but revenue is down 16 per cent.

That’s likely due to Microsoft’s increasing forays into the lower end of the market with Lumia. It may be selling more handsets, but those Lumia 530s of the world are bringing in far less cash. This quarter’s results were also dragged down by $190m in “integration and restructuring expenses” from last year’s deal to buy Nokia.

Of course, Microsoft remains in a transitional period with Windows 10 coming within the next few months. The firm hope the new operating system will spike the plummeting PC market and rejuvenate Microsoft’s bread and butter money maker.

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