REDMOND (dpa-AFX) - Microsoft Corp (MSFT) Tuesday reported a drop in fourth-quarter profit, due mainly on losses from the Nokia Devices and Services business acquired in April, notwithstanding an 18 percent growth in revenue.
Earnings for the quarter missed Wall Street estimates, while revenue surpassed expectations, as the software company's key businesses continued to flourish.
The results come amid a crucial phase for Microsoft, which under CEO Satya Nadella seeks to focus on mobile-and cloud-based computing; a departure from the path set by his predecessor Steve Ballmer, who was more focused on devices and services.
Nadella also wants to see Microsoft as a leaner and efficient company, and toward that end, announced steep job cuts, mainly at the Nokia Devices unit.
'We are galvanized around our core as a productivity and platform company for the mobile-first and cloud-first world, and we are driving growth with disciplined decisions, bold innovation, and focused execution,' said Nadella in a statement.
Microsoft shares were up 0.6 percent in after-hours trade on the Nasdaq, following the announcement of results.
The software giant said its Nokia Devices and Services business contributed revenue of $1.99 billion for the quarter, but ran an operating loss of $692 million and loss per share of $0.08.
As a result, Microsoft's fourth-quarter net earnings slid to $4.61 billion or $0.55 per share from $4.97 billion or $0.59 per share last year.
On average, 23 analysts polled by Thomson Reuters expected earnings of $0.60 per share for the quarter. Analysts' estimates typically exclude special items.
Microsoft, based in Redmond, Washington, said its total revenues for the fourth quarter climbed 18 percent to $23.38 billion from $19.90 billion in the prior year. Twenty-one analysts had a consensus revenue estimate of $23.00 billion for the quarter.
Excluding items, revenue for the quarter rose 22 percent and earnings per share 6 percent.
Microsoft's Devices and Consumer revenue for the quarter jumped 42 percent to $10 billion. Windows OEM revenue rose 3 percent.
Office 365 Home and Personal subscribers totaled 5.6 million subscribers, adding more than 1 million subscribers this quarter.
Microsoft sold 1.1 million Xbox consoles, and generated revenue of $409 million from the sale of Surface tablets.
Microsoft's commercial revenue for the quarter increased 11 percent to $13.48 billion year-over-year. Windows volume licensing revenue grew 11 percent, and server products revenue, including Azure, gained 16 percent.
Earlier this month, market research firm Gartner Inc (IT) said worldwide PC shipments climbed a modest 0.1 percent percent to 75.8 million units, year-over-year, in the second quarter of 2014 after consecutive quarters of lower shipments.
Last Thursday, Microsoft said it will eliminate up to 18,000 positions over the next year; pre-tax costs related to the cuts would be between $1.1 billion and $1.6 billion and will be recorded in fiscal 2015.
Microsoft stock closed Tuesday at $44.82, down $0.01 or 0.03%, on a volume of about 38 million shares on the Nasdaq. In after hours, the stock gained $0.26 or 0.58%.
Copyright RTT News/dpa-AFX