LinkedIn brings in nearly $1 billion for Microsoft

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This was the first full quarter in which Microsoft included results from LinkedIn Corp., the professional social network it acquired in December for $27 billion.

Microsoft (NASDAQ:MSFT) has dipped 1.6% after hours after its fiscal Q3 report, in which net income swelled to $4.8B but revenues missed expectations.

The reason was a shortfall in the company's More Personal Computing segment, which includes Windows and hardware like the Surface tablets, booked $8.84 billion in revenue - well behind average expectations of $9.22 billion (according to StreetAccount), and down 7% from a year ago.

Revenue by segment: Productivity and Business Processes, $7.96B (up 22%); Intelligent Cloud, $6.76B (up 10.9%); More Personal Computing, $8.84B (down 7.4%).

Revenue in the productivity and business processes unit was $8 billion, up 22 percent from a year ago. Diluted earnings per share stood at $0.73 non-GAAP ($0.61 GAAP).

Intelligence Cloud revenue increased 11% to $6.8 billion.

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Analysts had been modeling revenue of $23.65 billion and EPS of 70 cents.

Since launching the Surface line, Microsoft's own devices have made up an increasingly important part of the company's revenue (though revenue from phones, of course, has been tanking for a few quarters now and continues to do so). Its "office commercial products and cloud services business saw revenue rise 7%". The business of selling Windows to PC manufacturers was up 5%, and other Windows sales and services were up 6%.

Like every quarter, Microsoft just reported earnings for the last quarter. Office 365 consumer subscribers increased from a total of 24.9 million last quarter to 26.2 million. Windows OEM Pro revenue rose by 10% (10% CC), "ahead of the commercial PC market, mainly due to a higher mix of premium SKUs"; while non-Pro revenue fell by 1% (1% CC), although Microsoft pointed that this still "outperformed the consumer PC market". Xbox software and services revenue rose by 7% (8% CC), "driven by continued adoption of digital distribution and a strong game lineup".

The LinkedIn acquisition contributed revenue of $975M.

To the surprise of no-one, it was another terrible quarter for Microsoft's phone hardware business, with revenue falling by $730 million.