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NEW YORK. – PCs may not be thriving the way they once were, but Microsoft has posted a strong set of financials for the fourth quarter of its 2014 financial year on the back of substantial, sustained growth in its cloud businesses. Revenue for the quarter was $23,38 billion, up 17,5 percent on the same quarter a year ago. Operating income rose 6,7 percent to $6,48 billion, and earnings per share were down 5 percent to $0,56, with the drop largely attributed to a hefty tax adjustment. The results for the quarter were complicated by Microsoft’s purchase of Nokia’s Devices and Services business, which closed in April. In the wake of the purchase, the company has adjusted the way it breaks down its earnings.

The “Devices and Consumer Hardware” segment has been renamed “Computing and Gaming Hardware.” This includes Surface and Xbox hardware. A new segment, “Phone Hardware” will cover the Nokia business.

Devices and Consumer Licensing, spanning OEM and retail/consumer Windows and Office licensing, was up 9,5 percent at $4,70 billion. Gross margin was up 13,6 percent to $4,40 billion. Windows OEM revenue was overall up 3 percent. The difference between the corporate and consumer worlds is stark: non-pro revenue was down nine percent, with Pro revenue up 11 percent. The former represents the majority of end-user sales; the latter corporate sales. Microsoft reports that the (long overdue) Windows XP replacement cycle is continuing to stimulate these corporate sales. Office consumer revenue outpaced the overall consumer PC market, rising 21 percent.

For the full financial year, D&C Licensing revenue was down 1,2 percent to $18,80 billion, with gross margin up 1 percent to $17,22 billion.
The newly named Computing and Gaming Hardware segment saw revenue grow 23,4 percent to $1,44 billion, with gross margin of $0,02 billion, as compared to a loss of $0,65 billion for the same quarter a year ago attributed to the $0.9 billion write-down for the first generation Surface devices.

Surface revenue was $0,41 billion. Microsoft declined to give any indication of the Surface cost of revenue but noted that there was impact from a “decision to not ship a new form factor.” – Agencies.