Microsoft surprised Wall Street with a powerful performance. Technology is proving one of the most resilient sectors in an uncertain economy, with 84% of tech companies beating earnings estimates for the latest quarter.
Analysts had trimmed profit targets for Microsoft over the past three months, concerned by the launch of an ambitious reorganization by retiring chief executive Steve Ballmer and the pricey acquisition of Nokia Oyj’s handset business, even as the company’s core personal computer market ebbs away.
As part of its reinvention as a “devices and services” company, Microsoft now reports under two main groups, one covering its devices and consumer business, and one its commercial business.
The commercial side was the stronger in the quarter, posting a 10% increase in revenue, chiefly from selling Office and server software to businesses. The consumer and hardware group’s revenue rose a more modest 4%, held back by another poor quarter for the Windows system as sales of personal computers continue to decline.