The net loss in the fourth quarter, which ended June 30, amounted to $3.2 billion, and sales fell 5.1 percent to $22.2 billion, Microsoft said Tuesday in a statement.
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Microsoft reported a net loss of 40 cents per share.
The difficult quarter comes ahead of the launch of Windows 10 on July 29, a free upgrade for users of Windows 7 or 8. Revenue for Microsoft’s cloud services, such as Office 365 and Azure, rose 88% this quarter, the company reports.
After defining its strategy on tablets, the company recently said that it would focus on indigenous (first-hand) hardware for phones that would target three customer groups: business, value and fans. Microsoft is taking on Facebook (FB), whose Oculus VR headset to this point remains a mystery since Facebook acquired the company for $2 billion past year. Those two charges were applied in addition to the $7.5 billion noncash impairment charge, totaling $8.4 billion dollars worth of negative impact against the company or a negative $1.02 per share for investors.
Excluding items, the company earned 62 cents per share. The consensus estimates from Thomson Reuters call for $0.56 in earnings per share (EPS) on $22.06 billion in revenue. Windows Phone also isn’t doing well, seeing a 68% decline in revenue despite a 10% growth in Lumia sales, mostly because most Windows Phones sold were low-end devices. Microsoft announced that phone hardware revenue decreased 38% to $748 million in 2015.
“We have a formula there that I would like to apply more broadly”, Nadella said. Bing, too, increased its market share and search advertising revenue. This range reflects Windows revenue roughly in line with the PC market, within consumer office we expect the transition to Office 365 subscriptions to continue.
Microsoft Windows 10 OS has been their ray of hope, and the company has been working on this for years, and with the public announcement almost a year ago, the efforts have doubled up and the company has been working harder than ever, to promote their brand and to keep the image bright and positive in dark times. Reported by Microsoft, its “commercial cloud” revenue run rate on an annual basis is now over $8 billion. Stockholders of record on Thursday, August 20th will be given a dividend of $0.31 per share. Office Commercial products and services revenue slipped 4 percent for the quarter, while Windows volume licensing revenue dropped 8 percent.
Microsoft (NASDAQ:MSFT) traded up 0.77% on Tuesday, hitting $47.28.
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