Microsoft’s hardware strategy under scrutiny after record loss

The software giant adjusted earnings of 62 cents against revenue of $22.2 billion, beating predictions of 56 cents and $22.06 billion. Xbox revenue alone is up 27 percent. The shares rose 8.6 percent in the quarter, while the Standard & Poors 500 Index fell less than 1 percent.


The fall owed largely to an accounting change when Microsoft slashed the book value of its Nokia phone business by billions of dollars alongside thousands of layoffs.

Last month, Nadella unveiled the biggest management overhaul in his 18 months as CEO.

Microsoft has previously confirmed that Windows 10 apps will work on Xbox One – such as the the company’s new internet browser Microsoft Edge.

But Microsoft is not used to reporting quarterly losses, and IDG News Services noted this is the first net loss for a quarter in three years for the firm.

How well Windows 10 will do remains to be seen, we’ll know more when Microsoft reveals its financials next time.

Microsoft’s closely watched “cloud” software business, including Web-friendly versions of Office for businesses and the Azure computing service did ok. Considering the hyper-competitive nature of the tablet market, such an increase is certainly not to be baulked at, and Hood touched upon how bringing the fiscal year to a relatively successful end “with solid progress against our strategic priorities, through strong execution and financial discipline”. How else do you make money when you sell your phone business, and your most famous brand is associated with sinking PC sales? Additionally, commercial Office was soft, with growth of 1% in constant currency, as transactional revenue was impacted by the continued transition to Office 365 and the decline in business PC sales. That matched analysts’ average projection.

Digital Trends said the Windows 10 for mobile will allow users to browse and buy applications through a new application store. The earnings were majorly hurt by a .5 billion write-down related to the company’s flopped purchase of the Finnish IT multinational company’s handset division.

“Consumer demand continues to be weak”, said Colin Gillis, an analyst at BGC Financial LP in New York.


Still, Microsoft executives said there were bright points in an earnings report with a gloomy bottom line.

Microsoft's hardware strategy under scrutiny after record loss