Microsoft Corporation (NASDAQ:MSFT) reported its second fiscal quarter earnings after the closing bell, and shares have fallen only slightly in after-hours trades. The stock is down 2 percent after the software giant’s earnings report indicated earnings per share of 76 cents—just a penny more than expectations. The company reported earnings of $6.4 billion and a 3 percent increase in revenue to $21.46 billion. In the same quarter last year, the company reported $20.89 billion in revenue.
Today’s results are the first indications we have of how well Windows 8 might be doing. As the computer industry becomes more and more competitive, Microsoft Corporation (NASDAQ:MSFT) was looking to Windows 8 to improve its sales. The new operating system is a major change from Windows 7. For the most part, it did away with the desktop in favor of a tiled screen. The system works pretty well for mobile devices, but Microsoft wasn’t able to get away from the desktop layout entirely. Windows 8 also takes you to a desktop screen for certain programs.
While Microsoft Corporation (NASDAQ:MSFT)’s basic earnings numbers weren’t stellar, dissecting them gives us a better picture of what the company is really doing. Overall earnings slipped almost 4 percent in the company’s second fiscal quarter, mostly due to the company’s entertainment and business departments. However Microsoft’s Windows department increased significantly, as both the company and investors were hoping.
Revenue from Microsoft Corporation (NASDAQ:MSFT)’s Windows division rose 24 percent. After adjusting for deferred revenue and previously deferred revenue, the division’s revenue rose 11 percent, while its profits rose 14 percent. Microsoft’s servers and tools division saw a 9.5 percent increase in revenue and an 8.8 percent increase in profits.
However the business unit of the company, which is where Microsoft Office is essentially housed, saw sales reduced by almost 10 percent. Profits were down 15 percent. This information weighs heavily on Office 365, the cloud-based version of Office released by the company last year.
Microsoft’s entertainment division saw sales decline 11 percent, although profit was up 15 percent. Revenue from Bing and Microsoft Corporation (NASDAQ:MSFT)’s other online services rose 11 percent.