(MoneyWatch) After a relative disaster the previous quarter, Microsoft (MSFT) wowed investors by blowing past analyst expectations, pushing up its stock price more than 5 percent in after-hours trading. But the financial details show continued weakness in the company's core client computing business.
Microsoft's first-quarter revenue for its fiscal-year 20014 was $18.5 billion, up 16 percent from a year ago. Earnings per share jumped 17 percent to 62 cents.That easily beat estimates by Wall Street, which had forecast revenue of $17.8 billion and earnings per share of 54 cents.
The company's commercial division saw strong gains. Cloud computing sales, an important category for the software giant's future growth, more than doubled year over year, and important business software categories hit double-digit increases. On the consumer end, search ad revenue grew by 47 percent.
But not all of the results were good. Microsoft sold $400 million worth of its Surface tablets, but disclosed no information on the number of units. Given the price of the devices -- the Windows RT-based original starts at $349, while the Surface 2 starts at $449 and Surface 2 Pro, $899 -- unit sales would be a fraction of the almost 15 million iPads that Apple (AAPL) sold in the April-to-June quarter. Microsoft claimed that "sequential growth in revenue and units sold over the prior quarter," but didn't specify further. Meanwhile, Windows revenue from hardware partners dropped by 7 percent.
A linchpin of Microsoft's strategy -- control of the client operating system -- is effectively shattered. Last quarter the companyfor revenue and earnings. The big culprit was the lack of Surface sales. Microsoft even took at $900 million inventory write-down on Surface RT tablets. However, SEC filings suggest that the Surface did even worse than previously thought because consumer hardware sales had been down through the introduction of the device family.
The big miss helped