Skip to main content
Advertising

Originally published June 9, 2014 at 8:01 PM | Page modified June 12, 2014 at 6:12 PM

  • Share:
           
  • Comments (0)
  • Print

Microsoft’s expansion into hardware pushes revenue up

Microsoft landed in the No. 2 spot in The Seattle Times’ 23rd annual ranking of publicly traded Northwest companies. Its strength and pervasiveness among corporations and other large organizations helped boost its bottom line.


Seattle Times technology reporter

Microsoft at a glance

Headquarters: Redmond

CEO in 2013: Steve Ballmer (Satya Nadella named CEO on Feb. 4, 2014)

Employees in 2013: 99,000

What it does: Creates software, services and hardware

What sets it apart: Sheer size and breadth

2013 cash flow: $24.6 billion

2013 sales: $77.8 billion

Years in ranking: 23

Highest ranking: No. 1 (for 1991, 1992)

SEC filings, Bloomberg

advertising

Microsoft is one company that needs no introduction.

From its Windows operating system to Office productivity suite, there are few in the world who haven’t heard of the Redmond-based software giant.

In the past several years, though, the rap on the company was that it had fallen behind its competitors in key areas such as mobile and search — and its stagnant stock price reflected that line of thinking.

What some have overlooked, though, was that even in those years, Microsoft continued to log billions in revenue and profits.

Indeed, it was a strong year of sales that helped Microsoft nab the No. 2 spot in The Seattle Times’ 23rd annual ranking of Northwest-based publicly traded companies.

From Azure to Xbox One, Dynamics to Office 365, Microsoft’s breadth of offerings all contributed to a fiscal year that brought in $77.85 billion in sales and $21.86 billion in profit, and a calendar year that brought in $83.43 billion in sales and $22.83 billion in profit.

And, as usual, Microsoft’s strength and pervasiveness among corporations and other large organizations helped boost its bottom line.

But there was also a somewhat surprising factor that contributed to Microsoft’s jump in revenue last year: how well it did in consumer-hardware sales.

Among Microsoft’s various product categories, consumer hardware was the fastest growing in terms of revenue last year, said Sid Parakh, an analyst with Seattle-based investment firm McAdams Wright Ragen.

Certainly, the November launch of Xbox One ­— the long-awaited successor to the Xbox 360 gaming console — played a big role.

But so did the Surface tablet, Microsoft’s first branded computing device. The second generation of the device, launched in October, helped boost Surface sales to $893 million in the last quarter of calendar 2013, double the amount from the preceding quarter. Parakh characterized Surface sales as showing solid growth last year.

Such growth, however, comes with the caveat that Microsoft launched the Surface line of tablets only in October 2012, so any percentage growth could be seen as a big jump. In addition, the company took a nearly $1 billion write-down on one version of the first generation Surface last year.

And the gap between Microsoft and competing iPad and Android devices is evident in that, despite stronger sales, the Surface has not made make a big dent in the tablet market, and Microsoft lost money with each Surface tablet it sold.

The one area where sales did not do so well was the one that Microsoft is perhaps best known: Windows, whose revenue was down last year.

“There was strength across the board except for Windows,” Parakh said.

In 2014, Microsoft so far has continued to show strength among both its commercial and consumer customers. Its new CEO, Satya Nadella, has generated positive buzz and its stock price is among the highest it’s been in a decade.

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com. On Twitter @janettu.



Want unlimited access to seattletimes.com? Subscribe now!

Also in Business & Technology

News where, when and how you want it

Email Icon

The summer is wide open.

The summer is wide open.

Follow our three-part "Washington's National Parks" series running through August 10 for an in-depth look at some of our local treasures.

Advertising

Advertising


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►