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Microsoft posts loss of USD 2.1 bln on mobile phone costs
2015-07-22 00:18:00| Telecompaper Headlines
(Telecompaper) Microsoft reported a net loss of USD 2.1 billion or USD 0.40 per share for its fiscal fourth quarter to June, hurt by the earlier announced impairment charge of USD 7.5 billion to write down the value of the former Nokia mobile phone business. The company also took charges of USD 940 million for the planned lay-offs at the mobile business and other restructuring. Excluding the one-time charges, the company had a profit of USD 0.62 per share, up from USD 0.56 a year ago. Adjusted operating profit was still slightly lower, at USD 6.39 billion versus USD 6.61 billion in the year-earlier period, as revenues fell 5 percent to USD 22.18 billion. Over half the drop in revenues came from the stronger US dollar, and the remainder was largely due to the Devices and Consumer division, where sales fell 10 percent to USD 8.7 billion. This included a 22 percent fall in Windows revenues with OEMs, due to the end of the XP replacement cycle and manufacturers awaiting the launch of Windows 10. Revenues from the mobile phone business fell 38 percent to USD 1.2 billion, amid lower shipments of both smartphones and feature phones. Other products performing well in its Devices and Consumer business included the Surface tablet, with revenue up 117 percent from a year ago to USD 888 million, and the Xbox, which grew console sales 30 percent to 1.4 million. Search advertising revenue was up 23 percent, and Microsoft said it expects Bing to be profitable in the next fiscal year. Commercial revenue increased slightly to USD 13.5 billion, led by strong demand for cloud products such as Office 365, Azure and Dynamics CRM Online. Windows volume licensing revenue declined 8 percent. Looking ahead, Microsoft said it expects the launch of Windows 10 to start supporting results from the second half of fiscal 2016. Sales in the phone business are expected to continue to show "significant" year-on-year declines, while losses should start to reduce as the recently announced restructuring takes effect.
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Category:Telecommunications