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Microsoft beats Q2 estimates on rising profits

by Jason Gumpert
Editor, MSDynamicsWorld.com

Microsoft reported on Thursday that 2014 fiscal second quarter profits rose 3 percent based on revenue growth in both the Devices and Consumer, as well as Commercial lines.

The company reported a profit of $6.56 billion, or 78 cents per share, compared with $6.38 billion, or 76 cents per share, in the year-ago quarter. Revenue was $24.52 billion for the quarter, up 14% year over year in GAAP terms.  

Earnings per share beat Wall Street's average estimate of 68 cents, according to Thomson Reuters.

Microsoft Q2 FY14 Commercial Segment performance
 From Microsoft's earnings call slides

On the Commercial side, where the Dynamics ERP and CRM products reside, Microsoft's cloud services revenue "more than doubled." Office 365 commercial seats and Azure customers both grew triple-digits, and Dynamics CRM Online contributed to that growth, according to the earnings announcement.

Commercial revenue rose 10% to $12.7 billion in the quarter compared to the previous year, with gross margin increasing $751 million or 8%. These increases reflected, in Microsoft's words, "growth in revenue from our on-premise licensing businesses as well as adoption by customers of our Cloud Services. Commercial gross margin increased $950 million or 10%, in line with revenue growth."

In the first quarter of the fiscal year, Microsoft also beat estimates Microsoft. Q1 introduced the new reporting structure, which put the Dynamics business under its Commercial segments - Commercial Licensing (for CAL-based licenses) and Commercial Other for Dynamics CRM Online, Azure, and other services.

Business Central Dynamics 365 Dynamics AX Dynamics CRM Dynamics GP Dynamics NAV Dynamics RMS Dynamics SL Microsoft Corporate
About Jason Gumpert

As the editor of MSDynamicsWorld.com, Jason oversees all editorial content on the site and at our events, as well as providing site management and strategy. He can be reached at jgumpert@msdynamicsworld.com.

Prior to co-founding MSDynamicsWorld.com, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. He has also held consulting positions at CSC Consulting and Monitor Group.

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