Microsoft profits fall after Nokia handsets acquisition

Nieuws Algemeen Wereld 23 JUL 2014
Microsoft profits fall after Nokia handsets acquisition

Microsoft reported pressure on quarterly profits in its fiscal fourth quarter after completing the acquisition of Nokia's handset business. Earnings for the three months to June fell 7 percent from a year earlier to USD 0.55 per share, including a loss of USD 0.08 per share from the phone business. 

Revenues rose 18 percent year-on-year to USD 23.38 billion, with USD 1.99 billion coming from the former Nokia business, and operating profit improved 7 percent to USD 6.48 billion, with a loss of USD 692 million from the handset activities. Microsoft said it sold 5.8 million Lumia smartphones in the quarter, as well as 30.3 million other mobile phones. 

Microsoft's revenue growth was otherwise supported by a recovering PC market, with Windows OEM revenue up 3 percent. Office 365 added another 1 million consumer subscribers in the quarter, and Bing increased advertising revenues by 40 percent. The Surface tablet contributed USD 409 million in revenue, while Microsoft noted that it decided to not go ahead with a mini version of the device. Xbox revenue was up 4 percent, with 1.1 million consoles sold in the quarter. 

In the commercial market, server product revenues, including Azure, were up 16 percent, and Windows licensing volume rose 11 percent. Overall, consumer and device revenues increased 42 percent to USD 10.0 billion, and commercial revenues were up 11 percent to USD 13.5 billion. 

Microsoft CEO Satya Nadella also provided more details of his new strategic vision for the group on the conference call about results. This will include merging the existing versions of Windows into a single platform for all types of devices and screen sizes. The next version of Windows will consolidate three OS into one, as well as unify the company's developer platforms and app stores. More on this will be announced in the coming months, the CEO said. He added that Microsoft will continue to make its own devices to promote select services, such as with the Surface, while also promoting the Windows platforms to other OEMs. 

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Nokia,  Microsoft,  Bing

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Enterprise equipment, Financial figures, IT - applications, Consumer devices

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