Microsoft Corp (MSFT)
Earnings Release  FY14 Q1
Revenue growth driven by Surface sales
Surface
Improved sales and marketing efforts
Sold more than double the units than previous quarter
Surface 2 and Surface Pro 2 launched Oct. 22nd
Xbox
1.2 million Xbox consoles sold
Xbox One will launch Nov. 22nd
Gross margin
Product costs grew with increased Surface sales and non-product expenses incurred to ready inventory lines for Surface 2 launch

D&C Hardware revenue increased $401 million or 37%, due primarily to Surface revenue of $400 million. The general availability of Surface RT and Surface Pro started October 26, 2012 and February 9, 2013, respectively.

D&C Hardware gross margin decreased $242 million or 54%, due to a $643 million or 101% increase in cost of revenue, offset in part by higher revenue. D&C Hardware cost of revenue increased, primarily due to $645 million higher Surface cost of revenue. Surface product costs increased with higher volumes sold, while other costs grew as we ready inventory lines for the Surface 2 launch and the holiday sales cycle.

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Share
Devices and Consumer Hardware
RESULTS (in millions, except percentages)
Q114 Q113 Change
Revenue $ 1,485 $ 1,084 37%
Gross Margin $ 206 $ 448 (54)%
FY14 Earnings Release Schedule
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