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Microsoft reports biggest quarterly loss ever as it writes down Nokia
Microsoft New Zealand doesn’t break-out quarterly earnings, and the picture is murked by some cloud services being booked offshore.
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Earnings were reduced by a total of US$8.4 billion in charges, including the writedown of the Nokia purchase and restructuring charges related to job cuts and other integration efforts, the report said.
The Redmond, Washington-based company reported a quarterly loss of $3.2 billion, or $0.40 per share, versus a year-ago profit of $4.61 billion, or $0.55 per share.
Microsoft is pushing hard to get businesses to use its Azure Cloud platform, but CEO Satya Nadella says that the company hasn’t given up on its products tailored for companies that still have on-premises data centers. The company is scheduled to roll out Windows 10 on July 29, a much-awaited launch after a lackluster response to Windows 8.
The stronger U.S. dollar had a significant impact on results during the most recent quarter, noted Microsoft CFO Amy Hood, who anticipates this will continue to affect financial results throughout fiscal year 2016.
With Windows 10 set to launch next week, there is hope that Microsoft will see better financial results in the next quarter as people begin to upgrade to systems running the new operating system.
Revenue for Microsoft’s commercial cloud computing-a crucial segment that includes Office 365 and Azure-grew 88 percent year-over-year.
Office 365 consumer subscribers hit 15.2 million with 3 million added in the fourth quarter.
Microsoft’s Q4 FY2015 news taken separately from the now proven Nokia debacle; operating income would have been $6.4 billion and a return to investors at $0.62 .62 a share. Revenue from Microsoft’s Surface tablet business more than doubled year over year to $888 million, driven by sales of the Surface Pro 3 and Surface 3.
An accounting charge wiped out Microsoft’s profit for the quarter, leading to its largest loss ever, the company said Tuesday, making clear the cost of its missteps in the mobile business.
Commercial revenue increased slightly (up four per cent in constant currency) to $13.5 billion. Also up were its server products and services, and Dynamics revenue.
Phone hardware revenue decreased 38 percent, as Lumia phones revenues dropped on a mix shift to lower price point devices.
The company expects the commercial cloud portion of its revenue to grow to a $20 billion revenue run rate inside the next two years.
The net loss of $3.2bn was announced alongside revenues of $22.18bn, a 5pc decline on the previous quarter.
On the commercial, volume licensed side, Windows revenue was down 8 percent and Office revenue was down 18 percent.
“While the PC ecosystem has been under pressure recently, I do believe that Windows 10 will broaden our economic opportunities and return Windows to growth”, Nadella said.
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Microsoft will expand its partners to sell Surface – from over 150 to more than 4,500 resellers globally.