While most geographies performed as expected, Latin America, the Middle East, and Africa turned in weaker than expected performance.Sales of Windows have tracked the declining PC industry, though the company’s More Personal Computing segment, which includes the flagship operating system, has been a bit more resilient.The company reported earnings per share (EPS) of $0.47, a 25% drop from the same quarter a year ago. Revenue slid 5.5% to $20.5 billion, and on an adjusted basis rose 1.6% to $22.08 billion.
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Surface revenue shot up 56% to $1.1 billion.
Microsoft has re-iterated its belief in a mythical annual income of $20bn from cloud despite growth in Azure and its apps-as-a-service business slowing. Gross margin also fell 4 percent.
Microsoft has announced results for its third quarter of fiscal 2016 (company follows a June fiscal ).
Microsoft said its Intelligent Cloud segment, which includes its lineup of Azure public cloud services, posted a revenue increase of 3% to $6.1 billion.
In the earnings call, Microsoft CEO Satya Nadella said the company was working to make Office 365 a world-class productivity and communications service. Ms. Hood said Office 365 “helps pull along new usage of Azure”. Commercial seats are up 57 percent year-on-year.
Enterprise Mobility Customers grew more than twice to 27,000 while server products and cloud services increased by 5 percent.
Accordingly, phone revenue dipped 47 percent, dragging down overall device revenue by 11 percent. Among server products, the company saw gains in subscription revenue offset by declines in transactional purchases.
Windows OEM revenue is down two percent in constant currency, but Microsoft says this performance is actually better than that of the PC market as a whole. Cloud revenue is expected to be in the range of $6.5 to $6.7 billion. Office 365, in particular, is rocketing, with revenues up 63pc. “For phone we expect year over year revenue declines to deepen in Q4 as we work through our Lumia channel position”.
Microsoft hasn’t revealed the latest sales figures for its Xbox One console, but a statement by EA leads to a figure of fewer than 20 million units sold. A product line that was reaching double digit share in a number of European markets and growing has been eviscerated.
Phone revenue slid 46 per cent in constant currency, while Surface revenue increased 61 per cent in constant currency, which Microsoft stated was driven by the Surface Pro 4 and Surface Book.
However, Phone revenue declined by 46% in constant currency.
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Search advertising revenue (excluding traffic acquisition costs) grew 18% in constant currency, benefiting from Windows 10 use, Microsoft said.
