Lumia and Surface Sales Drive Microsofts $26.5bn Q2 Revenues

Microsoft Surface Microsoft has reported revenues of $26.5bn (£17.5bn) and operating profits of $7.8bn for Q2 2014 (the three months ended 31 December 2014).

Search advertising revenues grew 23 per cent, with Bing gaining a 19.7 per cent market share in the US, but the highlight of the results was Microsofts hardware division.

The company sold a record number of its Surface tablets, bringing in revenues of $1.1bn, up 24 per cent on last year. This is driven by the Surface Pro 3, introduced in June last year as a more portable alternative to a laptop, which is selling three times as many units as its predecessor, the Surface Pro 2.

Lumia smartphones achieved a record 10.5m sales during the quarter, up 30 per cent year-on-year, a growth which Microsoft attributes to consumer interest in affordable entry-level smartphones. Despite a further 39m sales for Microsofts non-Lumia handsets,  however, revenues from its phone hardware segment were down 12.5 per cent quarter-on-quarter, to $2.3bn.

“Microsoft is continuing to transform, executing against our strategic priorities and extending our cloud leadership,” said Microsoft CEO Satya Nadella.  “We are taking bold steps forward across our business, and specifically with Windows 10, to deliver new experiences, new categories, and new opportunities to our customers.”

Microsoft last week unveiled what 2015 would hold for the company, including the release of Windows 10 across platforms and the development of its HoloLens holographic headset. With these launches ahead, and sales of its two flagship mobile brands – Lumia and Surface – on the rise, it looks to be an interesting 12 months for Microsoft.