Microsoft profits surge 17%, beating expectations

Steve Ballmer and microsoft logo Investors are eager to find out who will be replacing Mr Ballmer, who is retiring

Related Stories

Microsoft reported better than expected earnings of $5.2bn (£3.2bn).

Profits at the technology giant were up 17% from the same period last year.

"Our devices and services transformation is progressing," said boss Steve Ballmer in a statement. He added that Microsoft is launching a "wide range" of new products in the coming quarter.

The report shed no light on who is to replace Mr Ballmer, who announced plans to retire within the next year.

The company has released several new products this quarter, including an update to Windows 8, and recently bought the mobile phone unit of struggling Finnish giant Nokia.

Shares rose 6% in after hours trading on the strong results.

Surface sales

For the first time, Microsoft also announced sales of its tablet computer, Surface.

Surface Despite positive reviews, sales of the company's first tablet computer have been disappointing

It said revenues from Surface "grew to $400 million with sequential growth in revenue and units sold over the prior quarter".

Last quarter, the company was forced to take an embarrassing write down of $900m after sluggish sales.

The computer, well-liked by reviewers, marked Microsoft's first foray into hardware manufacturing.

However consumers, many of whom expressed displeasure at Microsoft's update to its popular operating system Windows, did not bite.

The company still did not provide sales figures of the device.

Succession plans

Investors hoping for any information about who will replace Mr Ballmer in the new year were disappointed.

Earlier today, on a conference call to discuss earnings, Ford boss Alan Mullaly declined to comment on rumours that he was being considered for the top job.

Other contenders include Stephen Elop, the former head of Nokia, who resigned as boss after Microsoft announced it would purchase the Nokia's mobile phone unit for 5.4bn euros ($7.2bn; £4.6bn) in September.

Mr Elop is now head of Devices and Services at Nokia, although he is expected to transfer to Microsoft - where he was once a top manager - once the deal is completed.

Mr Ballmer has been at the helm of Microsoft since 2000, and has been at the company since 1980.

More on This Story

Related Stories

More Business stories

RSS

BBC Business Live

  1.  
    CHINA FOOD SCARE 09:06:
    Workers producing food at the Shanghai Husi Food Co., a factory of US food provider OSI Group, in Shanghai

    Chinese police are questioning staff of US food supplier OSI Group for selling expired meat, according to state media. Shanghai authorities on Sunday shut an OSI plant - a supplier to McDonald's and KFC in China - for mixing out-of-date meat with fresh product, re-labelling expired goods and other quality problems following an investigative report by a local television station.

     
  2.  
    TIME WARNER TAKEOVER 08:52:
    Rupert Murdoch, executive chairman of News Corporation,

    Time Warner has tightened up its bylaws just in case its shareholders get twitchy and try to call a special board meeting to discuss a second attempted takeover bid from Rupert Murdoch's 21st Century Fox, according to a report in the Daily Telegraph. It follows the news that Time Warner rejected an $80bn (£46bn) approach from Fox last month. The amendment blocks a standard rule that 15% of a company's investors can vote to call a special meeting.

     
  3.  
    MARKETS UPDATE 08:37:

    European markets have opened higher this morning, despite fears over further European economic sanctions against Russia. Royal Mail is the biggest faller on the FTSE 100 down 3.5% to 450.4p after is said its parcels revenues fell 1% in the three months to 29 June:

    • The FTSE is 0.42%, or 28.57 points, higher at 6,757.01
    • Germany's Dax is 0.67%, or 64.08 points higher at 9,676.13
    • France's Cac-40 is up 0.56%, or 24.07 points, to 4,328.61
     
  4.  
    RUSSIAN SANCTIONS 08:23: BBC Radio 4

    Prof Marie Mendras, a former French government adviser, is speaking on the Today Programme about sanctions on Russia after last week's plane crash. She's particularly talking about Russia's order of warships from France. French President Francois Hollande is "stuck" she says. He may reconsider the sale of the second warship. "Each country is trying to defend its economic interests," she says.

     
  5.  
    RUSSIAN SANCTIONS 08:13: BBC Radio 4

    The European Union's (EU) economic sanctions against Russia are likely to be tightened today, when European foreign ministers meet in Brussels following the downing of Malaysia Airlines flight MH17, the BBC's Europe Editor Gavin Hewitt tells the Today programme. It is most likely those sanctions may see more people added to the list of proscribed persons in an effort to bring EU sanctions in line with those in the US. But Germany and the UK are at odds over how tough sanctions should be, he adds.

     
  6.  
    ROYAL MAIL Via Twitter Kamal Ahmed BBC Business editor

    tweets: Royal Mail: despite parcels performing less well, letters decline is not as rapid as expected. Performance in line with guidance

     
  7.  
    LIDL TAX 07:48: BBC Radio 4

    BBC business reporter Joe Lynam points out that as a German company that operates in the UK, Lidl doesn't have to disclose the amount of corporation tax it pays in Britain, but adds it is likely the supermarket does not want to be seen in the same light as Starbucks, Google and Amazon, who were widely criticised last year over the amount of corporation tax they did or did not pay here.

     
  8.  
    ARM RESULTS 07:35:
    Arm

    Chipmaker Arm posted a 9% rise in second-quarter profit, helped by strong demand to license its technology. The Cambridge-based company, which had previously made microchips for Apple's iphone and receives revenue for selling its blueprints and royalties, reported pre-tax profit of £94.2m.

     
  9.  
    LIDL TAX 07:29: BBC Radio 4

    German discount retailer Lidl has disclosed it paid £25m in tax in 2013 following a campaign to get it to publish its full financial accounts in the UK. Bryan Roberts from retail analysts Kantar Retail suggests that means Lidl is paying around 20% in corporation tax on a 3% margin. Julian Bailey, a spokesman for Morrison's supermarket tells the Today Programme it is "a pity it took Lidl so much time" to disclose how much tax it pays.

     
  10.  
    ROYAL MAIL 07:17:
    Royal Mail letterbox

    Royal Mail says it's had a weaker-than-expected performance in UK parcels, "largely driven by the intensifying competitive environment" in the three months to 29 June. "Given the increasing challenges we are facing in the UK parcels market, our parcels revenue for the year is likely to be lower than we had anticipated," it said.

     
  11.  
    VODAFONE COVERAGE 07:10: Radio 5 live

    Jeroen Hoencamp, the Vodafone UK chief executive has been on 5 live talking about the firm's rollout of 3G to rural areas that previously had poorer mobile internet access. "We need to be very careful there won't be a digital divide between urban and rural areas," he says.

     
  12.  
    CREDIT SUISSE 06:59:
    The logo of Swiss bank Credit Suisse

    It's not a great day to be a Swiss banker, especially one working for Credit Suisse, which has this morning reported its biggest loss in nearly six years. It took a 1.6bn Swiss-franc charge (£1.04bn) as part of its settlement with authorities over tax evasion charges. The bank has also reported a loss of 700m Swiss francs for the second-quarter, compared with a profit of 1.05 billion francs a year earlier.

     
  13.  
    PUBLICIS RESULTS 06:51:

    Communications firm Publicis, which you'll remember tried to merge with rival Omnicom, said it would be "very difficult" to meet its annual target of 4% growth in sales after a second-quarter slowdown. Part of the reason was the end of that merger, it said, as well as the strength of the euro.

     
  14.  
    MARKETS UPDATE 06:44:

    After a rally in Asia in the wake of a softer approach from Russia overnight, following the downing of Malaysia airline's flight MH17, European markets are expected to open a bit higher this morning. The Nikkei rose 1% to 15,368.28, while the Hang Seng rose 1.4% to 23,716.24.

     
  15.  
    RUSSIAN SANCTIONS 06:37: BBC Radio 4

    London houses enough Russian money that the UK could "really hurt" the country through economic sanctions and the freezing of assets - particularly property, but businesses as well - following the downing of Malaysia Airline's flight MH17, should it want to, says money laundering expert Jeffrey Robinson, who has been described by the British Bankers' Association as "the world's leading financial crime author".

     
  16.  
    PENSION PROTECTION FUND 06:25: Radio 5 live

    Lady Barbara Judge is on 5 live. She's the chairperson of the Pension Protection Fund, which pays your pension if your employer goes bust. It's basically a re-insurance system, she says. They manage £16bn of assets. "It's very important people get good guidance on what they're doing" in pensions, she says.

     
  17.  
    TESCO 06:10: Radio 5 live
    Tesco"s chief executive Philip Clarke

    More from Richard Dunbar, investment director at Aberdeen Asset Management, on 5 live, this time talking about the departure of Tesco chief executive Philip Clarke. "He made some good decision tidying up the overseas portfolio," Mr Dunbar says. But, "it was also the UK business that was the problem" which he "didn't get to grips with." He may be asked to work until the start of next year to help the handover to his successor, Dave Lewis, he says.

     
  18.  
    SFO INVESTIGATION 06:02: Radio 5 live

    Richard Dunbar, investment director at Aberdeen Asset Management, is on 5 live talking about the Serious Fraud Office's investigation into the foreign exchange market. "There are 15 agencies now looking into it," he says, and despite being a £15trn market, it is a "surprise such a big market can be manipulated in the way the SFO may feel."

     
  19.  
    06:00: Matthew West Business Reporter

    Morning everyone. The big news from overnight is that Yahoo has acquired app analytics firm, Flurry, to help boost its advertising revenue from smartphones. As always you can get in touch with us at bizlievepage@bbc.co.uk and on twitter @bbcbusiness.

     
  20.  
    06:00: Howard Mustoe Business reporter

    Good morning everyone. There's a number of financial results and some economic data slated for today, so we'll be bringing you the best of that, and much, much more. Stay tuned.

     

Features

  • VigoroAnyone for Vigoro?

    The bizarre Edwardian attempt to merge tennis and cricket


  • ScissorsTwo more years

    How the UK's life expectancy changes without Scotland


  • Payton McKinnonLeft behind

    Why do so many children die in hot cars?


  • Dr Mahinder Watsa Dr Sex

    The wisecracking 90-year-old whose agony column is a cult hit


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.