By Tess Stynes
Microsoft Corp. on Monday said its earnings fell more than 10%
during the quarter ended December on costs related to its
streamlining effort and its integration of the mobile phone
business acquired from Nokia last year.
Shares fell about 3% in recent after-hours trading as the
company's collection of software like Windows, Office and server
products sold to corporations came back down to earth a bit in the
quarter. Sales in Microsoft's commercial division rose 5%, a bit
below analyst expectations and slower than the revenue growth in
the prior two quarters.
The company's bottom line has been hit in recent quarters by
expenses related to job cuts started last summer and the Nokia
mobile phone business that it acquired in April. The July plans
included up to 18,000 jobs cuts, or about 14% of its workforce at
the time, largely to clear up overlap with the Nokia
businesses.
For the period ended Dec. 31, Microsoft reported a profit of
$5.86 billion, or 71 cents a share, down from $6.56 billion, or 78
cents a share, a year earlier. Microsoft said its per-share
earnings in the latest quarter were hurt by 2 cents from costs
related to integration and restructuring.
Revenue increased to $26.47 billion from $24.52 billion.
Analysts polled by Thomson Reuters expected per-share profit of
71 cents and revenue of $26.29 billion.
Microsoft, which makes most of its profit on software sales to
companies, reported that its commercial revenue rose to $13.3
billion from $12.7 billion.
In its cloud business, which is much smaller but considered key
to Microsoft's growth, the company reported that sales more than
doubled and is on pace to have $5.5 billion in revenue this fiscal
year. Microsoft cited sales of its Web-friendly version of Office,
a tool for salespeople and its Azure online service for the
growth.
In its devices and consumer segment, which includes the Nokia
phone segment and its Xbox business, sales improved 8% to $12.9
billion. Sales of Microsoft's Surface tablet jumped 24% to $1.1
billion. Xbox console sales fell to 6.6 million units, compared
with 7.4 million units reported a year earlier.
Through Monday's close, the stock has risen nearly 28% over the
past 12 months.
Shira Ovide contributed to this article.
Write to Tess Stynes at tess.stynes@wsj.com
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