Microsoft's earnings beat expectations, charges hit revenue
Microsoft is expected to open almost 4% lower on Wednesday, after the tech giant said late on Tuesday that it suffered from restructuring charges and soft demand for its legacy software products.
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The Windows software maker reported earnings of 62 cents per share and $22.18bn, exceeding expectations calling for earnings of 56 cents per share and revenue of $22.03bn.
However, including previously disclosed write-downs, the company reported a $3.2bn quarterly loss, driven by a $7.5bn cost related to the acquisition of Nokia, while total impairment integration and restructuring charges amounted to $8.4bn.
Over the last 12 months, the Redmond-headquartered group has shifted away from PCs and toward cloud services and revenue for the cloud computing arm jumped 88% year-on-year, or 96% on a constant currency basis.
"Our approach to investing in areas where we have differentiation and opportunity is paying off with Surface, Xbox, Bing, Office 365, Azure and Dynamics CRM Online all growing by at least double digits," group chief executive Satya Nadella said in a statement.
Microsoft said it added nearly 3m of subscribers to its Office 365 platform, bringing the total number of subscribers to over 15m.
However, sales of Windows and Office software, which accounted for most of the company’s business in the past, continued to struggle, with revenue in the division falling 22% year-on-year.