But lost profits, which means Microsoft is most likely cannibalizing its traditional Office business with the 365 one, so the "growth" for 365 is pretty misleading, if it's just converting traditional Office customers to 365 ones.
Yes, GAAP EPS is(7%), mostly because the Nokia acquisition and the EU fine. That means that their core businesses grew, that can be considered strong as many were expecting a dying PC business. Their operating income increased by 7%. That's why analysts see this as a strong quarter (considering they've been dead for a while ... /s).
It's good to keep in mind that they're not really a startup and they're squeezed in almost all areas, so approximately maintaining revenue and income is all right.
You can speculate all you want, here is the data: "Windows volume licensing revenue grew 11%." and "Windows OEM revenue grew 3%, driven by 11% growth in Windows OEM Pro revenue."
Being down 7% is never alright. You can make all the excuses you want but profit and revenue is down no matter how you word it or what the reasons are.
Source: BBC Business