An often irreverent look at this week's other Microsoft earnings news ...

Microsoft Earnings: Huge Gains in Profits, Revenues

As a reminder, Microsoft announced that it earned a $5.2 billion profit on revenues of $18.5 billion for the quarter ending September 30, 2013. Those figures represent a 17 percent jump in profits ($4.5 billion in the same quarter one year ago) and a 16 percent jump in revenues. Read more in my news story "Microsoft Quarterly Earnings: Profits Up 17 Percent, Revenues Up 16 Percent," but know this: The firm's profits were 62 cents per share, much higher than the expected 54 cents per share. Microsoft, in the middle of a huge personal computing downturn, has defied some expectations again.

Microsoft Earnings: Windows Struggles Continue

Given the year the PC market is having, it should come as no surprise that Microsoft's Windows business is struggling right along with it. I was sort of amused to see Microsoft put a positive spin on this fact by noting vaguely that "Windows Pro revenue grew for the second consecutive quarter," whatever that means. (Microsoft has never called out "Windows Pro revenue." Ever.) But here's what really happened: Windows (client) income was down 20 percent in the quarter, overall, and that's an interesting point because the quarter we're comparing with—the third calendar quarter of 2012—is the last one in which Windows 7 was the primary offering. That said, there is some comparatively good news, too: Windows OEM revenue (i.e., from new PC sales) wasn't down as much as expected: That fell only 7 percent. (It was down 15 percent in the prior quarter.) Basically, despite all the spinning, the truth is fairly obvious: As the PC market goes, so goes Windows.

Microsoft Earnings: Vague Statements of Positive Surface Sales

Speaking of being purposefully vague, Microsoft made some interesting comments about Surface as part of its earnings announcement. The firm says that Surface revenues were $400 million in the quarter and that it sold twice as many Surface tablets in the quarter as it did in the previous calendar quarter. (We can't compare year-over-year because Surface RT debuted in October 2012 and Surface Pro debuted in February 2013.) That sounds OK, but we don't know how many Surface tablets Microsoft actually sold, nor do we know the breakdown of (price-reduced) Surface RT and Surface Pro units. That said, Microsoft did mention in a post-earnings conference call that Surface RT sales were better than anticipated, especially the 32GB version, again without specifying any details. Pricing something correctly helps, apparently.

Microsoft Earnings: About That Nokia Sale

Looking over Microsoft's financial statements for the most recent quarter, a thought struck me. Microsoft announced recently that it intended to purchase the important parts of Nokia for $7.2 billion—a figure that sounds like a staggering sum on the face of things. But when you put this in perspective, you can see how a company the size of Microsoft can pull off such a feat, and easily: In just this one quarter, Microsoft's supposedly struggling consumer efforts were responsible for $7.5 billion in revenues (while business-related revenues accounted for $11.2 billion). It helps, too, that Microsoft can finance the purchase using offshore cash, but you get the idea. Anyway, Microsoft's pending purchase came up during the Q&A part of the post-earning conference call, when CFO Amy Hood said she expected it to finalize in the first calendar quarter of 2014.

Microsoft Earnings: Xbox Falls Off a Cliff

Last week, I mentioned that Microsoft was for some reason celebrating what it called the "biggest-ever" September for Xbox 360, despite the fact that this milestone was about software, not hardware, and that none of that software was exclusive to the Xbox 360. Since then, I discovered why: For the first time in years, the Xbox 360 wasn't even the best-selling console that month, a fact Microsoft deliberately left out of its cheerleading release about the month's results: Sony's PlayStation 3 actually outsold it. Looking at the results from the Entertainment and Devices business that is responsible for Xbox 360 (and not much else), we can see that this downward trend is worse than expected: The business actually lost $15 million in the quarter, a drop of 171 percent year-over-year, and revenues were flat at about $2 billion. Obviously, this business is gearing up to release the Xbox One in November, and not a moment too soon. Clearly, this thing is hitting the market a year too late, and Microsoft's expectations of a longer life for the Xbox 360 are perhaps unfounded. We'll see what happens there, but Microsoft expects consumer hardware revenues in the current quarter to hit $3.8 to $4.1 billion, with Xbox One being a big contributor.

Microsoft Earnings: Office 365 Home Premium Hits the 2 Million Subscriber Mark

The consumer version of Office 365, called Office 365 Home Premium, has hit the 2 million subscriber mark, Microsoft said. This comes just five months after it hit the 1 million mark back in May. (The service first launched in January, so this is pretty consistent growth.) But here's a weird one: Consumer Office revenues still declined overall this quarter, though Microsoft said it expected that. A tremendous value at $99.99 per year, Office 365 lets you install the full Office 2013 Professional Plus suite on up to five PCs in a household, so it works for multiple users in a family. And for the record, that's a much better deal than Apple's supposedly free iWork suite, which only works on that firm's high-priced Macs and iPads. No need to spend through the roof to get office productivity, folks. You can get the superior solution from Microsoft, and it's bargain-priced.

Microsoft Earnings: A Few More Random Stats

Microsoft stock was up 5.4 percent in after-hours trading Thursday, to $35.55 ... Bing search usage share in the United States is now 8 percent ... Microsoft returned $3.8 billion in cash to shareholders in the quarter ... Microsoft expected another double-digit decline in Windows revenues, but it fell only 7 percent ... Microsoft expects a "terrific holiday season" with revenues of  $23.1 billion to $24.1 billion in the quarter.

But Wait, There's More

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