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Microsoft (NASDAQ: MSFT) had announced its reported earnings for its first fiscal quarter of 2017, and while the software giant managed to beat analysts’ expectations, there are some areas of the company which has seen a decline. We’ll be looking at a total of three segments of Microsoft’s business, which includes productivity and business, cloud and personal computing.

Microsoft (NASDAQ: MSFT) Saw Its Revenue and EPS Grow Year-Over-Year, Beating Expectations as a Result

Microsoft’s revenue for Q1, 2017 included revenue of $22.3 billion and earnings per share of $0.76. In contrast to the company’s Q1, 2016 results, Microsoft (NASDAQ: MSFT) saw $21.7 billion in revenue and earnings per share of $0.67. Analysts expected that Microsoft (NASDAQ: MSFT) would see a revenue of $21.71 billion and earnings per share of $0.68, clearly showing that the software giant managed to beat these expectations. According to the company, it had returned $6.6 billion to shareholders in the form of share repurchases and dividends during the quarter. Furthermore,pre-trade is currently sitting at $60.30, which could be an 'all-time-high' mostly because Microsoft (NASDAQ: MSFT) has beaten expectations and how the firm has quickly repositioned itself as a cloud company.

Microsoft (NASDAQ: MSFT) CEO Satya Nadella stated the following in a statement following the Q1, 2017 results:

“We are helping to lead a profound digital transformation for customers, infusing intelligence across all of our platforms and experiences. We continue to innovate, grow engagement, and build our total addressable market.”

As stated before, we have broken down the company’s earnings into three segments, and we’ll be detailing three of them below.

Productivity and Business

Productivity and Business include results from both Office and Office 365, and it grew 6 percent to $6.7 billion. Office commercial products and cloud services revenue grew 5 percent, with Office 365 revenue up 51 percent. Microsoft (NASDAQ: MSFT) relies on a subscription-based revenue system to deliver to customers.

Cloud

The cloud segment features server products and services, which naturally includes Windows Server and Azure, and it grew 8 percent to $6.4 billion. As for server products and cloud services, this revenue grew 11 percent. However, the bulk of the revenue was generated by Azure, which grew 116 percent. Not only this, but the usage of Azure compute more than doubled year-over-year.

Personal Computing

Personal Computing generated more revenue for the company in contrast to the remaining two business segments, even though it declined 2 percent to $9.3 billion. This business segment of Microsoft (NASDAQ: MSFT) includes Windows licensing and devices such as Surface tablets and notebooks, Windows 10 Mobile phones and Xbox gaming consoles. Windows OEM Pro revenue increased 1 percent, while non-Pro revenue decreased 1 percent. Surprisingly, Microsoft’s Surface revenue increased 38 percent from $672 million in Q1 2016 to $926 million in Q1 2017. This shows that both Surface Pro 4 and Surface Book have been selling well, but Microsoft (NASDAQ: MSFT) has not divulged the exact number.

Unfortunately, Microsoft’s Windows 10 Mobile remained in free fall as the company’s phone revenue declined 72 percent. Even at the company’s October 26 event, there are no new mobile devices expected. As for advertising revenue from search, it grew 9 percent, and that’s mostly due to Windows 10, which features a tighter integration with Bing. Gaming revenue also declined but not by a massive amount. Despite winning the U.S. market share from Sony, revenue declined 5 percent.

The summary of the earnings for the quarter ended September 30, 2016, have been listed below:

Revenue was $20.5 billion GAAP, and $22.3 billion non-GAAPOperating income was $5.2 billion GAAP, and $7.1 billion non-GAAPNet income was $4.7 billion GAAP, and $6.0 billion non-GAAPDiluted earnings per share was $0.60 GAAP, and $0.76 non-GAAP

We’d want to hear your thoughts on Microsoft’s Q1, 2017 results. Let us know what you think in the comments below.