Microsoft profit takes a hit
January 27, 2015
Microsoft reported a fall in quarterly profit amid a strong US dollar and slumping personal computer sales, which cooled demand for Windows software.
Net income fell 10 percent from the year-ago quarter to $5.9 billion (5.3 billion euros). But revenue actually increased to $26.5 billion in the quarter ended on December 31, as the number of subscriptions grew in the cloud. However, the company noted revenue fell from licensing Windows software to computer makers and businesses.
Microsoft's iconic Windows business has been under pressure as PC sales have declined, although the market seems to have stabilized in recent months.
Currency pressure from a strong US dollar also dampened profit in the fiscal second quarter, Microsoft said, but did not specify the amount.
The US-based computer and technology giant receives almost three-quarters of its revenue from overseas, with the bulk of that still being in US dollars.
Earnings from China and Japan fell particularly short of expectations, Microsoft added.
Silver lining
But the company wasn't fazed by the dip in profit. Chief executive Satya Nadella believed the quarterly results show Microsoft is on course in shifting to "cloud first, mobile first" models, building upon its legacy of selling packaged software for computers.
"I am encouraged by the progress we are making in our transformation," Nadella said.
The company also saw rising sales of Microsoft devices, such as Surface tablets, Lumia smartphones and Xbox One video game consoles.
el/ng (AFP, Reuters)