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Microsoft suffered its first revenue decline since 2009

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Microsoft suffered its first revenue decline since 2009

Microsoft suffered its first revenue decline since 2009
July 20
14:00 2016

Microsoft Corp., the world leader among the software companies, got the profit that exceeded the market expectations in the fourth financial quarter ended on 30 June. Nevertheless, the revenue for the last financial year fell for the first time since 2009. According to the press release of Microsoft Corp., the company’s net profit in April-June amounted to $ 3.12 billion or 39 cents per share, compared with a net loss of $ 3.2 billion or 40 cents per share. This data is for the corresponding period of the previous fiscal year.

Also, the press release notes that the loss in the fourth financial quarter of the last year was associated with the write-off in the amount of $ 8.4 billion due to the purchase of Nokia. The profit of Microsoft, not taking into account write-offs and restructuring costs, was equal to 69 cents per share versus 62 cents last year. FactSet conducted a survey where the experts, on average, made the forecast of this index at the level of 58 cents per share.

The company’s revenue fell by 7.1% in the last quarter – to $ 20.61 billion. Experts made the consensus forecast for this indicator which was equal to $ 22.1 billion. According to the results of the last fiscal year, Microsoft got the net income in the amount of $ 16.8 billion or $ 2.10 per share, compared with $ 12.19 billion or $ 1.48 per share last year. At the same time, the annual revenue declined to $ 85.32 billion from $ 93.58 billion.

Over the past quarter the company returned to its shareholders $ 6.4 billion as dividends and at the expense of repurchased securities. The department of the company Intelligent Cloud, which includes the Azure cloud service and business for producing software for servers, increased its revenues by 7% to $ 6.7 billion in the last quarter. Azure Service increased its sales by 102%. Productivity and Business Processes department, which produces, in particular, Office apps, increased revenues by 5% to $ 7 billion. But its profits decreased almost by 7%. Sales of products and Office services for corporate clients grew up by 5%, for private users – by 19%, while the number of Office subscribers has grown to 23.1 million.

More Personal Computing Business, which includes Windows, Xbox gaming consoles and Surface tablets, reduced the revenues by 4% to $ 8.9 billion. Sales of the department products increased by 9% due to the release of Surface Pro 4 and Surface Book. Meanwhile, the revenue from the phone sales has fallen by 70%. The quality of active users of Xbox Live went up by a third to 49 million people in 2015.

The operating system Windows 10 was released in the summer of 2015. However, Windows 10 continues to steadily increase the number of users. The operating system has been already installed on more than 350 million devices. This figure is a record in the history of Microsoft. Users have the opportunity to upgrade their OS on Windows 10 until 29 July free of charge. Meanwhile, last week the company said that they hadn’t managed to reach the goal of 1 billion devices by June 2018 because of the production decrease of smartphones.

Microsoft securities fell in price by 4% at the extra auction in New York after the finish of the substantive session on 19 July. Their value increased by 11% in the last quarter.

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