Microsoft's Profit Slides 25%--Update
April 21 2016 - 6:17PM
Dow Jones News
By Jay Greene
Microsoft Corp. said its earnings declined 25% in the third
quarter, as the company reported lower operating profits across
several of its business lines.
Shares fell 4.1% to $53.46 in recent after-hours trading as
per-share earnings and revenue missed expectations.
The Redmond, Wash., software giant's Intelligent Cloud segment,
which includes its Azure on-demand computing services, posted a
revenue increase of 3.3% to $6.1 billion. But the segment's
operating profit declined 14% to $2.19 billion.
The Productivity and Business Processes segment, which includes
Microsoft's Office franchise, sales rose 1% to $6.52 billion -- but
profit declined 6.6%.
Revenue from the More Personal Computing segment, which includes
the flagship operating system Windows, edged up 0.9% to $9.46
billion, while operating profit for the segment jumped 57%.
Factoring out currency effects, revenue in the Intelligent
Cloud, Productivity and Business Processes, and More Personal
Computing segments rose 8%, 6% and 3%, respectively.
Windows revenue from computer makers declined 2% in constant
currency, even as the uptake of Microsoft's nine-month-old Windows
10 has been rapid. Last month, Microsoft said that 270 million
active devices run the new operating system, though many of those
are free upgrades.
Microsoft's own Surface line of computers remains a bright spot
in the Windows world. The company said Surface revenue increased
61% in constant currency.
Microsoft said its third-quarter net income fell to $3.76
billion, or 47 cents a share, down from $4.99 billion, or 61 cents
a share, a year earlier.
Excluding the impact of revenue deferrals and restructuring
charges, adjusted earnings were flat at 62 cents. Revenue slid 5.5%
to $20.5 billion, and on an adjusted basis rose 1.6% to $22.08
billion.
Analysts surveyed by Thomson Reuters had expected Microsoft to
report adjusted earnings per share of 64 cents and sales of $22.09
billion.
Microsoft's gross margin, or the amount of gross profit the
company generates for every dollar of revenue, fell to 62.4% from
67%.
Write to Jay Greene at Jay.Greene@wsj.com
(END) Dow Jones Newswires
April 21, 2016 18:02 ET (22:02 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Microsoft (NASDAQ:MSFT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Microsoft (NASDAQ:MSFT)
Historical Stock Chart
From Apr 2023 to Apr 2024