Yesterday, the technology and software giant Microsoft (MSFT: Nasdaq) came out with its earnings. They showed in a fall in quarterly profit in line with expectations. The slowdown in computer sales has put downward pressure on sales for Windows operating software and the company is being impacted, in a negative way, by the strong US Dollar.
Microsoft second quarter earnings slid to 0.71 cents per share. The year before, in the same time period, came in at 0.78 cents per share. Revenue was up to $26.47 billion from last years $24.52 billion. This was supported from the company’s acquisition of Nokia’s mobile unit.
However, the technology giant took a hit in computer and gaming. Revenue here fell 11 percent to$4 billion as there is a slack in Xbox sales. Commercial revenue came in at $13.3 billion for the quarter. Revenue sales from devices and consumer revenue printed at $12.9 billion. Looking at its flagship Windows business, commercial licensing revenue fell off two percent as Office commercial took a hit.
Analysts expected earnings of 0.71 cents per share on revenue of $26.3 billion. The actual numbers, pretty much met these expectations.
Shares of MSFT Selloff after the News
After the earnings announcement the stock price sold off four percent. Commercial cloud sales came in with an annual revenue of $5.5 billion as this unit was supported by Azure, Dynamic CRM and Office 365. The cloud business is taking off. They should focus effort here to see how much of this niche they can carve out for themselves, especially with their windows enterprise server business as this unit has seen triple digit growth for six quarters in a row.
After the earnings release, Microsoft released a statement that said the company was continuing to grow and evolve in line with its strategic priorities.
Microsoft Release Two New Products
Last week, Microsoft rolled out Windows 10 and HoloLens. HoloLens is a pair of virtual reality goggles. These goggles incorporate computer screen images into the everyday world. There was no word as to when the goggles would hit the shelves. Windows 10 is the latest operating system which will be no cost to users.