Microsoft’s profit also shrank from nearly $5 billion in the first quarter of 2015 to just under $3.8 billion in the first quarter of this year.
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“In its fiscal 2016 third quarter, Microsoft execs said its intelligent cloud segment hit $6.1 billion, up 3.3 percent from the same year-ago quarter”.
Microsoft CEO Satya Nadella told analysts during a post-earnings announcement conference call that the company is very focused on Office 365.
Revenue in Microsoft’s intelligent cloud business, which includes the Azure cloud infrastructure-and-services business as well as products such as noncloud-related server software, rose 3.3 per cent to $6.1 billion in the quarter. Microsoft attributes this to a change in the mix of Windows PC sales, with more high-end products sold.
Accounting for deferred revenue that accounts for how Microsoft sells Windows and some other items, Microsoft’s profit would have been 47 cents a share. Xbox Live monthly active users rose to 46 million at a growth rate of 26 percent. It generated total adjusted revenue of $22.1 billion, largely in line with analyst estimates. The previous quarter’s growth was 11 percent.
For the most part, Microsoft’s story this quarter is similar to what the company has been doing for a while.
The latter’s sales ledger was not helped by a 46 per cent constant-currency fall in Windows Phone revenues, although to compensate somewhat the Surface enjoyed its second consecutive $1bn quarter, with constant-currency sales up 61 per cent. The commercial cloud segment of the company clubs together revenues from Azure and Dynamics CRM Online as well as Enterprise Mobility Suite (EMS), along with Office 365 business services, which encompasses Exchange Online, SharePoint Online and Skype for Business Online. As for server products and cloud services, Microsoft said revenue increased 5 per cent. Azure revenue increased by 120 per cent.
Microsoft Corp reported results that fell short of analysts’ expectations, showing its high-profile cloud business cannot quite make up for weakness in its core PC market. Consumer subscribes have almost doubled, from 12.4 million to 22.2 million. As with Office, the Windows figures showed surprising strength in consumer markets: Windows OEM non-Pro revenue was up 15 percent year-on-year, outpacing the consumer PC market, driven by a higher volume of premium device sales.
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Search advertising revenue (excluding traffic acquisition costs) grew 18% in constant currency, benefiting from Windows 10 use, Microsoft said.
