Going ahead, we expect that Microsoft will focus on developing an ecosystem of devices for its Windows 10 instead of just selling more smartphones.
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Revenue from sales of Windows to device makers fell 22 percent during the quarter, as a result of slower PC sales a year after the end of support for Windows XP.
Microsoft is reportedly banking on Windows 10 (which releases July 29), to recover from Q42015 loss.
And Commercial revenue “increased slightly” to $13.5 billion, with commercial cloud revenue growing by 88 per cent driven by Office 365, Azure and Dynamics CRM Online.
Microsoft also took restructuring charges of nearly a billion dollars as part of the move, which included some 7,800 job cuts worldwide.
“Gross margin, operating loss, and loss per share for the quarter were $14.7 billion, $(2.1) billion, and $(0.40) per share, respectively”, company officials announced.
Minecraft also continues to be a driving force for Microsoft, a property the company acquired last year for a hefty $2.5 billion from previous owner, Mojang. Microsoft recorded total impairment, integration and restructuring expenses of $8.4 billion including the charges related to the Nokia phone business.
According to a recently published report by Reuters, Microsoft’s hardware division, comprising of mostly Xbox and Surface tablets, is showing great sales.
The company’s shares fell 3.9 percent in after-hours trading following the quarterly results announcement. Analysts had expected US$3.25 billion.
Microsoft wants to generate revenue by building search and gaming into the Windows 10 interface, Chief Financial Officer Amy Hood said in April. In the meanwhile, you’ll at least have the opportunity to stream Xbox One games to a Windows 10-equipped PC thanks to the new OS’s Xbox app, so there’s that. With Nokia behind it, Microsoft is free to look to the future, which includes the Windows 10 launch in the near term and, probably, a few more measured mobile phone efforts down the road. Also up were its server products and services, and Dynamics revenue. The block-building marvel helped boost Microsoft’s first party revenue by 62 percent.
Excluding the overall impact of Nokia’s acquisition, the company would have gained with a positive operating income of $6.4 billion.
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“Our approach to investing in areas where we have differentiation and opportunity is paying off”, Nadella said.
