Microsoft said its third-quarter net income fell to $3.76 billion, or 47 cents a share, down from $4.99 billion, or 61 cents a share, a year earlier.
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Revenue at the software giant fell to $20.53bn from $21.73bn, lower than the $22.09bn analysts had expected. Adjusted revenue was $22.1 billion, in line with Wall Street forecasts.
The company’s net income for the quarter also witnessed a year-on-year drop of 25 percent to $3.8 billion; with the earnings per share recording a 23 percent decline to $0.47 per share. Analysts polled by Thomson Reuters expected 64 cents and $22.09 billion.
Overall, the company’s Intelligent Cloud business grew 3% (or 8% in constant currency) to $6.1 billion.
Microsoft’s array of business-focused cloud-computing businesses was on pace at the end of the quarter to take in about $10 billion in a full year.
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.
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. The previous quarter’s growth was 11 percent.
Office commercial products and cloud services revenue grew 7 percent driven by Office 365 revenue growth of 63 percent. The company’s attempt to convert its traditionally most-lucrative software business into a subscription revenue stream may be plateauing.
Microsoft shares tumbled in after-hours trades, falling 4.46% to $53.15 in after-hours trades.
Without the guidance ahead, the investing community will have to consider the actual earnings report as an incomplete picture.
Amy Hood, Microsoft’s chief financial officer told analysts on an earnings call, said the company expected continued growth from Surface products in the current quarter but warned that decreases in Lumia revenues would accelerate in the quarter. However, Office 365 grew 70 per cent in constant currency in the period before. EPS was down from $0.61 a year ago and revenue pulled back 5.5% YoY. Last month, Microsoft said that 270 million active devices run the new operating system, though many of those are free upgrades.
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Shares of Microsoft fell in after-hours trading, changing hands recently at $53.05, down $2.73, or almost 5 percent.
