Microsoft posted mixed first quarter earnings for its fiscal year 2016, with revenues of $21.66 billion – a 7. percent year-on-year decline that still exceeded analysts’ estimates.
Advertisement
Compared to the same quarter past year, Microsoft’s revenue has decreased by 12 percent from $23.2 billion, while net income has marginally increased by 2 percent from $4.54 billion.
Microsoft earned an adjusted $0.67 per share on adjusted revenue of $21.7 billion.
Windows 10: Revenue for the “More Personal Computing” unit, which includes the newly launched Windows 10, was down 17 percent from the same period previous year, to $9.4 billion.
Windows OEM earnings also dropped 6 percent, but Microsoft says its PC business is faring better than the overall PC industry, which, according to figures by IDC, saw an 8 percent drop in shipments from previous year.
“We are making strong progress across each of our three ambitions by delivering innovation people love”, said chief executive Satya Nadella. Three million more people joined the Office 365 subscription service, and Microsoft’s little-known Salesforce competitor called Dynamics even recorded a 12 percent growth in sales while tripling the number of its customers.
Microsoft did well in its Intelligent Cloud business, which includes Azure, server products, app and device management, and cloud-based identity and access management services, reaching $5.9 billion in revenue.
Microsoft handed out Windows 10 as a free update to consumers with Windows 7 or Windows 8 PCs.
This quarter also marked a change for how Microsoft reports earnings. The company’s multiplayer gaming platform grew by 28 per cent, with a total of 39 million active monthly users.
Microsoft’s Cloud Business: As Microsoft shifts from a PC-based company to more cloud-based, analysts are closely watching Microsoft’s cloud business as an indicator of future growth.
Dell’s acquisition of EMC will see Dell competing more closely against Microsoft’s cloud, and Microsoft’s further push into the computing space with an expansion of its Surface business will see Microsoft compete more closely against Dell.
Microsoft beat reporter Mary Jo Foley explains at ZDnet, “Microsoft has been working to streamline its search and advertising business business for months”. The reporting segment had an increase in revenue of eight percent-14 percent if you consider the strength of the dollar. Along with baking Bing into more products and services, the engine has been boosted by Microsoft’s partnership with Yahoo.
Advertisement
The big test for Windows will be in coming quarters as Microsoft rolls out its latest devices, including its first laptop, a revamped Surface Pro tablet and new Lumia phones.
