The company took a charge of $7.5 billion in the fourth quarter related to the restructuring of its Nokia handset business, which it bought previous year.
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Microsoft’s shares fell 3.5 per cent to $45.65 USA in extended trading on Tuesday.
Nadella has said previously that he wants the cloud division, which he oversaw before assuming the role of chief executive, to be $20 billion-a-year business by 2018.
Devices and Consumer revenue declined 13 per cent, with Windows OEM revenue decreasing 22 per cent as revenue was “impacted” by PC market declines following the XP end-of-support refresh cycle. Windows 10 might improve things slightly, but its effect will only be felt later this quarter, following its July 29 launch, and, more so, in the final quarter of the year.
But a notable drag on the quarter was the company’s $7.6 billion writedown of Finnish cell phone maker Nokia, which the company purchased for $9 billion two years ago.
For Microsoft’s fiscal year 2015, the company’s revenue, gross margin, operating income, and diluted EPS were $93,6-billion, $60,5-billion, $18,2-billion, and $1.48 per share, respectively.
Microsoft has announced losses of $3.2 billion (£2 billion) for the three months up until June 30 after posting $8.4 billion (£5.3 billion) of writedowns. Excluding items, the company earned $0.62 .62 per share.
Analysts claim that both the write-down of Nokia assets and upcoming release of Windows 10 has affected Microsoft earnings of this quarter. Cloud revenue was up by 88% as sales from cloud programs soared by 36% to $3.08 billion.
As for its outlook for the first quarter of fiscal year 2016, Microsoft expects its revenue for phone hardware to be around $900 million. Azure, Office 365, and the Microsoft Dynamics cloud enterprise software line also all saw at least double-digit revenue increases.
Office 365 attracted almost 3 million new subscribers in the second quarter of the year, with total subscribers reaching 15.2 million.
Microsoft’s historic cash cow Office is meanwhile making a smooth transition to to the cross-platform mobile and cloud world with 150 million downloads of Office Mobile for iOS and Android. With E5, we’ve expanded our market opportunity for Office 365 by more than $50 billion.
The company’s device sales, on the other hand, fell 13% to $8.7 billion.
Finally, Windows volume licensing revenue declined eight per cent.
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According to Microsoft, total Xbox revenue grew by 27%. Phone Hardware has been included in our consolidated financial results starting on April 25, 2014, the date we acquired NDS. The company unveiled a pair of new Windows Phones at Mobile World Congress in March but has otherwise remained quiet in the space. Surface revenue, however, skyrocketed and posted an increase of 117 percent to $888 million, mostly thanks to the Surface Pro 3.
