Sales down, profit up, 1,000 bods chopped: Your one-minute guide to Planet Microsoft

How the Windows 10 biz performed in the past quarter

Microsoft has published its figures for the first quarter of the 2016 financial year (its accounting department shuns calendars) and reports that profits are up, even though revenues fell.

"We are making strong progress across each of our three ambitions by delivering innovation people love," said CEO Satya Nadella in a canned statement. "Customer excitement for new devices, Windows 10, Office 365, and Azure is increasing as we bring together the best Microsoft experiences to empower people to achieve more."

These are the first quarterly results [XLS] since the launch of Windows 10 in July, and while it's early days yet, Wall Street analysts were looking for signs that the operating system is going to grow Redmond's revenues.

So how did the firm do in Q1 fy2016, ended September 30?

  • Net revenue for the quarter was $20.4bn (GAAP), down 12 per cent year-on-year. The firm's PC revenues fell by 17 per cent but this was offset slightly by an 8 per cent rise in cloud takings.

  • Net income grew by 2 per cent from this time last year to $4.6bn, and growth would have been in double percentage points but for the strong dollar.

  • Earnings loss per share are a better-than-expected $0.57, up 6 per cent from the first quarter of 2015.

  • Personal computing revenues were hardest hit, down 17 per cent, although that's 13 per cent with a currency correction. The continuing fall in PC sales left revenues from OEMs down 6 per cent and Windows Phone revenues cratered, down 54 per cent. But search revenues were up 29 per cent.

  • Cloud revenues grew 8 per cent and would have been higher but for the currency situation. Azure's revenue and usage has more than doubled in the past year, and Nadella noted that there were really only two players in the cloud game – both in Seattle.

  • Microsoft's productivity and business division revenues were down 3 per cent, but up 4 per cent if currency shenanigans are taken into account. The company added an extra 3 million Office 365 subscribers and revenues grew 70 per cent – with the inevitable currency correction.

Wall Street responded well to the news, and Microsoft's stock was up slightly in after-hours trading. However, today saw bad news for nearly 1,000 Microsoft employees, who will be getting the boot shortly. These redundancies are separate from previously announced pink slips.

"The job reductions were spread across more than one business area and country and reflect adaptations to business needs," a Microsoft spokesperson told El Reg. "We go through this process in the most thoughtful manner possible, with the deepest respect for affected individuals."

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