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We knew that Microsoft's quarter was going to be a rough one after it announced a $7.6 billion write-down of the Devices and Services division it purchased from Nokia last year, and so it has come to pass: on revenue of $22.2 billion, the company had a gross margin of $14.7 billion, an operating loss of $2.05 billion, a net after-tax loss of $3.20 billion, and a $0.40 loss per share.
This was driven by a $7.5 billion goodwill and asset impairment charge from Nokia Devices and Services, coupled with a new $0.78 billion restructuring charge, and a further $0.16 billion cost for integration and previously announced restructuring. In total, the company booked $8.4 billion of losses in the quarter.
This loss eclipses the $0.49 billion loss in that fourth quarter of its 2012 fiscal year that was driven largely by the $6.2 billion write-down of the aQuantive advertising firm.
But even absent that massive hit, the quarter wasn't a good one. That $22.2 billion of revenue is down 5 percent on the same quarter last year, and excluding the one-off Nokia charges, operating income was $6.39 billion, down 3 percent year on year. The company's Device and Consumer segment was down sharply, as sales of non-volume-licensed Windows and Office continued their fall on the back of a weak PC market: Windows license revenue from OEM preinstalls was down 22 percent, and consumer sales of Office were down 42 percent. Windows Phone revenue was down an even sharper 68 percent, due to a decrease in royalty payments, though sales of Lumia hardware were up more than 10 percent to 8.4 million, compared to 7.5 million in the same quarter a year ago.
Microsoft (MS) Office has always been a main revenue engine for them, so the 42 percent drop in consumer sales may be the most sobering part of the report, not so much for total sales (corporate are what's important) but as a canary in the coal mine for Office.
(Score: 5, Insightful) by Anonymous Coward on Wednesday July 22 2015, @10:16PM
The new guy knows he only gets one of those, so he and his aides shovelled everything they could into it.
(Score: 1, Interesting) by Anonymous Coward on Thursday July 23 2015, @12:58AM
Right. It's like the old joke about writing two letters for your successor. My big issue with this is that Microsoft destroyed Nokia's handset business. How many billions just when "poof" out of existence because of incompetent management? This is how big business operates today. One day, you've got a billion dollar business and the next it a tax write off? I feel like Microsoft should be fined for destroying jobs and decreasing the value of the global economy. Think of how many job have to be generated because Microsoft couldn't take an existing handset business and make a go at it.
(Score: 1) by kazzie on Thursday July 23 2015, @10:13AM
Oh, is that not what you meant?