Microsoft Earnings: As Hardware Kills Profits, Ceo Nadella Seeks Comfort In Software

Beneath the Surface Michael Homnick Microsofts Surface Pro 3 is a bright spot in its tablet lineup, but the company took a huge loss on Surface RT devices. Microsofts other hardware divisions didnt do much better. The Surface line, a titanic money pit since its very birth , finally realized that massive $900 million hit from Surface RT inventory adjustments, which it warned the world about many months ago. Also included in that writeoff, according to the Seattle Times? A hasty cancellation of a Surface Mini that was to have been announced in May. Beyond that, Microsoft kept mostly mum, saying only that the Surface divisionwhich released the Surface Pro 3 this past quartermade $409 million in revenue. The company, as usual, declined to break out hard tablet sales numbers or the lines operating profit or loss. Its very, very likely that Microsoft is continuing its habit of losing money with every Surface sold just like it is with Nokias phones. On the plus side, Microsoft sold 1.1 million Xbox consoles this quarter, an increase of 100,000 units over the same quarter of the previous year, good for an extra $104 million in revenue. An extra 100,000 units is less impressive, however, when you consider that Microsoft was selling onlythe aging Xbox 360 console this time last year, with the Xbox One then only on the horizon. Microsofts been busy backtracking on the Xbox Ones grand all-seeing, Internet-connected vision ever since, and consistently coming in second place in sales behind Sonys PlayStation 4 , month-in and month-out. Xbox unit sales were up, but Microsoft didnt say how many were the older Xbox 360 vs. the new Xbox One (shown above). Microsoft neglected to identify how many of those 1.1 million Xboxes sold were Xbox Ones. If a great number of those had been next-gen consoles, Microsoft no doubt would have crowed about it. Services, not devices Office 365 is a bright spot for Microsoft. So, in a nutshell: Microsofts hardware is stinking up the companys bottom line. Its bread and butter software, on the other hand, is excelling. The juggernaut that is Office 365 Home Premium added another 1 million subscribers this quarter, bringing the total subscriber count for this rising star up to 5.6 million. The overall Commercial divisions revenues were up $1.28 billion year over year as Azure and its ilk continued to shine. Heck, even Windows licensing revenue increased 3 percent overall in an overall bleak period for PC, as businesses replaced aging Windows XP devices with newer computers. The story’s so different on the software side of Microsoft’s ledger: Its Azure software for business flourished even as the company’s hardware stumbled.
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Microsoft weighed down by ailing Nokia – Yahoo Finance

Send Thanks! A link has been sent. Done Microsoft weighed down by ailing Nokia By James O’Toole 2 hours ago 0 shares Done It’s going to take more than layoffs for Microsoft to fix Nokia. Microsoft said Tuesday that Nokia’s devices and services business, which Microsoft acquired April 25, lost a stunning $692 million between that date and June 30, the end of the company’s most recent quarter. That loss includes some non-recurring expenses, but Nokia is clearly an unhealthy business. Microsoft is in the midst of a transition led by new CEO Satya Nadella, who announced plans last week to cut 18,000 jobs within the next year, or about 14% of the company. Most of those layoffs — about 12,500 — will come from Nokia. In a memo to Microsoft staff, Nadella said that Microsoft found many redundancies between the two companies, including both professional and factory workers. Nadella’s task now is to figure out how to make Nokia devices running Windows Phone software competitive in a sector dominated by Apple’s iOS and Google’s Android. He recently announced plans to kill off Nokia’s short-lived “Nokia X” Android smartphone experiment. Other parts of Microsoft’s business are healthier, with search advertising revenue from Bing growing 40% versus a year prior and subscriptions to the company’s Office 365 software rising by 1 million to more than 5.6 million.
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