Microsoft Q3 2014 earnings: Surface growth is soft, and Office 365 is a hit

Daniel Bader

April 24, 2014 7:01pm

Microsoft posted its fiscal Q3 earnings today, and the company met analysts’ expectations with an EPS of $0.68 on $20.4 billion revenue. Net income was $5.66 billion.

The numbers were down slightly over last year, but there were a few bright spots. Surface revenue reached $500 million, though the company did not break down which model earned more — Microsoft is still selling the original Surface products in some markets. This is a year-over-year increase of 50%.

Microsoft also reported that there are 4.4 million Office 365 Home subscribers, up a million from the previous quarter. The company requires an Office 365 subscription for mobile Office access on iPhone, iPad and Android.

The company is nearing closure of its Nokia acquisition, expected tomorrow. Once complete, Nokia’s Devices & Services division will be known as Microsoft Mobile. It’s unclear whether Microsoft will continue to sell Lumia devices under the Nokia brand.

  • Francois Roy

    Logitech K810 FTW

  • Shoey5

    50% growth is soft?

    • jackjiarocks

      Using a surface pro 2 now. Although there are compromises, I would say its still a solid solid price.

    • wes

      Use the surface pro as my daily driver. Love it. Yes there are compromises bu totally worth it for me.

    • Kyle Bly

      I love my surface pro, the digitized stylus is amazing for students

    • jackjiarocks

      I lost my stylus already. Why is it so hard for them to just make a hole to the pen into the machine.. .sigh

    • wes

      I got mine for 675$, but it the price for students went down to 450$!!! That was an amazing deal.. I see my classmates carrying their MacBooks and other laptops and I laugh at:
      1) how heavy their laptops are
      2) the price they paid

    • wes

      Can’t wait for my freedomcase! Always afraid of losing my digitizer.

    • wrc

      I have Android tablet (Galaxy Pro), iPad and Surface Pro 2 in my household. If you want to talk about compromises look at Android and iOS tablets. If you think iOS and Android are better operating systems for tablets than you’re kidding yourself.

    • syounger64

      Had an iPad one year for work while I had my surface rt for home. Looking back I tell people that the iPad is an overpriced toy.

  • gmaninvan

    “It’s unclear whether Microsoft will continue to sell Lumia devices under the Nokia brand”

    I thought the terms of the purchase flat out stated that Microsoft couldn’t use the Nokia name on anything but feature phones (Asha)?

    • monkeymo

      pretty sure they meant they aren’t sure if Microsoft will use the Lumia brand for upcoming devices. The 930 looks some what like a Surface phone, but give me the real thing please.

    • gmaninvan

      Using the Lumia brand would make more sense. As for a surface phone. You will be waiting a while. The acquisition closed today and Nokia likely has a year at least of product in the pipeline.

      Think of Google and Motorola. The Moto X was the first phone to come out of that partnership and it took a year and a half

  • BB BB

    Compared to Apple. The surface 2 non pro is a great general get things done tablet without having to worry about viruses. The Surface 2 has 2gb of ram and can multitask well without refreshing constantly like lousy ios 7 which refreshes every time you switch browser tabs.

    Microsoft obviously needs more apps but for work, and the boardroom it’s a great device. The Pro 2 needs to have more attractive pricing especially with storage considering windows OS leaves you with less than half of what you’re paying for. The $100 for each storage upgrade is very Apple-esque I’m sure Microsoft can be more creative than that considering SSD storage costs about a buck per gb