Despite a mixed response to Windows 8 and a global decline in PC sales, Microsoft reported net income of $6bn for the quarter ended 31 March 2013, up 17% from the same period a year ago.
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The software maker also reported revenues of $20.5bn, up 1% on the same period in 2012; and operating income of $7.61bn, an increase of 19% compared with the same period in 2012.
Analysts said Microsoft's profits were boosted in part by changing the way it sells software licenses to businesses and cost-cutting measures.
“The bold bets we made on cloud services are paying off as people increasingly choose Microsoft services including Office 365, Windows Azure, Xbox LIVE, and Skype,” said Microsoft CEO Steve Ballmer.
“While there is still work to do, we are optimistic the bets we’ve made on Windows devices position us well for the long-term,” Ballmer said.
The Microsoft Business Division posted revenue of $6.32bn, an 8% increase from the prior year period. During the quarter, Microsoft launched a new version of Office with new mobility, social and cloud features.
The Server and Tools business reported revenue of $5.04bn, up 11% on the same period a year ago. Microsoft said the increase was driven by double-digit percentage revenue growth in SQL Server and System Center.
Kevin Turner, chief operating officer at Microsoft, said the company continued to take market share from competitors in key areas including hybrid cloud, data platform and virtualisation.
The Windows division posted revenues of $5.7bn, a 23% increase from the same period in 2012. During the quarter, Microsoft added to the Surface family of devices with Surface Pro.
The Online Services division reported revenue of $832m, up 18% on the previous year. Online advertising revenue grew 22%, driven by an increase in revenue per search.
The Entertainment and Devices division posted revenue of $2.53bn, an increase of 56% from the first three months of 2012. Microsoft said Xbox LIVE now has over 46 million members worldwide, an 18% increase from the prior year period.
Concerns over smartphone and PC markets
Despite the better-than-expected numbers, Microsoft announced that chief financial officer Peter Klein is to leave the firm at the end of June.
Klein, who has been at the company for 11 years, is the latest in a series of executives to leave the firm. His departure comes just months after Windows head Steven Sinofsky left Microsoft, the BBC said.
The departures of senior figures come amid questions over the leadership of chief executive Steve Ballmer, with concerns about slowing growth and Microsoft’s failure to make a significant impact in the smartphone and tablet PC markets.