Microsoft said its revenue fell 5.1 per cent in its latest quarter, hurt by continued weak PC demand, and posted its biggest quarterly loss ever on a hefty writedown and other items related to the Nokia mobile phone business acquired past year.
As previously announced, in Q4 Microsoft took a non-cash impairment charge of $7.5 billion related to its acquisition of Nokia’s mobile phone business.
Including the write-down, the company was $US3.2 billion in the red, compared to a profit of $4.61 billion in the year-ago quarter.
Devices and Consumer revenue declined 13% (down 10% in constant currency) to $8.7 billion but Commercial revenue increased slightly (up 4% in constant currency) to $13.5 billion. The strategy included its Office 365 suite of OS-agnostic tools, especially bringing Apple users within the process. Analysts expect that Microsoft will post $2.42 EPS for the current fiscal year.
Shares fell 3.3 per cent in recent after-hours trading. Also, Director Maria Klawe sold 1,000 shares of the company’s stock in a transaction dated Friday, May 15th. This represents a $1.24 dividend on an annualized basis and a yield of 2.66%.
Microsoft Corporation (NASDAQ:MSFT) develops, licenses, markets, and supports software, services, and devices worldwide.
For starters, under new Chief Executive Satya Nadella, Microsoft is moving in fast-growing areas such as commercial cloud services with its Azure cloud platform.
Microsoft’s a company in flux and its fourth quarter earnings are proving just as much. The integration and restructuring costs totaled $8.4 billion during Q4. Computing and gaming hardware, including Xbox and Surface, delivered almost $2 billion in revenue.
Tech giant Microsoft (MSFT) will report FQ4 earnings for the 2015 fiscal year tomorrow after the markets close.
While revenue from Microsoft’s cloud-computing business rose on growth in the Azure and Office 365 programs, the gains were overshadowed by the writedown, an acknowledgment that the Nokia deal had lost nearly all its value after a little more than a year.
This means that while Microsoft isn’t yet on the cloud level of, say Salesforce.com (CRM) or Amazon (AMZN), whose dominant Amazon Web Services platform has become a standard, it does show the enormous growth potential in Microsoft’s commercial cloud segment.
Windows OEM revenue decreased by 22% as revenue was impacted by consumers and corporations no longer buying PCs because of Windows XP EOL and while not cited specifically, waiting for Windows 10 to arrive also likely impacted OEMs too.
The Surface business is now worth $888 million (£570m), and the Xbox was on the up to, with revenue from the games console up 27%. “Enterprise demand is continuing to crank along – that’s a bright spot”.