Microsoft Posts $3.2B Billion Quarterly Net Loss In Phone Business Reshuffle Write Nokia

Earlier this month, Microsoft announced a $7.5 billion write down of the Nokia phone business. The total restructuring costs are coming out to $8.4 billion. This resulted in a $3.2 billion quarterly net loss, the Redmond, Washington-based software maker announced on Tuesday in its fourth quarter earnings.

Still, results for the quarter topped analysts’ projections. Revenue for the fourth quarter came in at $22.2 billion, down 5% from the same quarter of last year, and an earnings per share of $.62. These results beat Wall Street estimates of $22.06 billion and an EPS of $.56.

Microsoft shares are currently down nearly 4% in after-hours trading.

The latest results showed how much Microsoft is transitioning away from consumer and more into the enterprise business. Revenue from devices and consumer declined 13% to $8.7 billion. The largest drag for Microsoft of course continues to come from the tanking PC business with Windows revenue coming from PC makers decreasing by 22%. A bright spot in this business is revenue from its two-in-one Surface devices, which grew 117% to $888 million. Xbox revenue grew 27%. The number of consumer subscribers for its Office 365 product grew nearly 25% to 15.2 million. Even when one wants to start a simple catering business there is so much planning that needs to go into it.

Revenue from the enterprise side of Microsoft’s bumped up a little to $13.5, up 4% over the previous year. The biggest growth area here for Microsoft is coming from its commercial cloud cloud products that include Office 365, Dynamics CRM Online and Azure. Commercial cloud revenue increased 88% for an annual revenue rate of more than $8 billion. But growth in this crucial commercial cloud business does not appear to be keeping up. Last quarter, Microsoft reported that this business had experienced its seventh straight quarter of at least 100% growth.

“Our approach to investing in areas where we have differentiation and opportunity is paying off with Surface, Xbox, Bing, Office 365, Azure and Dynamics CRM Online all growing by at least double-digits,” said Satya Nadella, CEO at Microsoft, in a statement. “And the upcoming release of Windows 10 will create new opportunities for Microsoft and our ecosystem.” Compare energy usage with UK companies on www.businessenergyuk.com

Even with the impending launch of Windows 10 on July 29th, Microsoft may not see a much of bump in its financials for the rest of the year from the PC business. Analyst firm Gartner expects global PC shipments to decline 4.4% overall in 2015. Because Windows 10 is a free upgrade for existing Windows 7 and Windows 8 users, analysts expects many of these users will stick with their current PCs rather than buying new ones.

Microsoft-Posts-$3.2B-Billion-Quarterly-Net-Loss-In-Phone-Business-Reshuffle-Write-Nokia

About the author

Asmaa Mubita is a Kenyan journalist of international repute with over fifteen years of experience in broadcast journalism. Asmaa Mubita began his journalism career at the Kenyan state broadcaster (KBC) and later worked at the KTN owned by the Standard Group and Citizen Television, the flagship brand of Royal Media Services. These exploits together with his reporting experience with the Voice of America, CNN and BBC have been rewarded with local and global recognition.

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