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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Microsoft Corp. said its revenue fell 5.1% in its latest quarter, hurt by continued weak PC demand, and posted its biggest quarterly loss ever on a hefty write-down and other items related to the Nokia mobile-phone business acquired previous year.
Sales from Windows, the core of the Microsoft business, fell 22% as the company ramped up for the release of the new Windows 10 operating system, aimed at both personal computers and mobile devices. 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. During a conference call with financial analysts on Tuesday, Microsoft CFO Amy Hood attributed the decline to the company’s more targeted approach to phones, going forward.
While revenue from Microsofts cloud-computing business rose on growth in the Azure and Office 365 programs, sales of Windows to PC makers and corporate customers sagged.
Office 365 adoption, at some 1 million new subscribers every month, adding to 15 million current subscribers, is a major driver of that cloud expansion, Nadella said.
This move is quite applicable considering Microsoft’s more recent push with hardware such as the Surface tablets and its announcement of the HoloLens headset, which will presumably have access to a few universal apps, as well as its own bespoke ones. Microsoft reported net income of $4.61 billion United States, or 55 cents per share, a year earlier. Excluding the Nokia restructuring losses, revenue is still down when compared to last year’s $23.28 billion. Also the shrinking PC market contributed to the decline. Excluding currency impacts, revenue dropped 2 per cent. Analysts polled by Thomson Reuters expected revenue of $US22.03bn. Microsoft’s sales of phone hardware grew, but revenue from Lumia smartphones declined because of increased sales of cheaper devices.
Looking ahead, Microsoft said it expects the launch of Windows 10 to start supporting results from the second half of fiscal 2016.
Search advertising revenue grew 21 percent with Bing USA market share at 20.3 percent, up 110 basis points over the prior year. It has hit an annualized revenue run rate of more than $8 billion, the company said.
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Commercial revenue saw slight growth of 4% to reach $13.5 billion. Surface revenue, however, skyrocketed and posted an increase of 117 percent to $888 million, mostly thanks to the Surface Pro 3.
