REDMOND (dpa-AFX) - Software giant Microsoft Corp. (MSFT) said Monday after the markets closed that its second quarter profit fell 11% from last year, hurt mainly by integration and restructuring costs as well as higher income tax expenses even as revenue increased 8% due to strong sales of its gadgets and cloud-based products.
'Microsoft is continuing to transform, executing against our strategic priorities and extending our cloud leadership,' said Satya Nadella, chief executive officer of Microsoft. 'We are taking bold steps forward across our business, and specifically with Windows 10, to deliver new experiences, new categories, and new opportunities to our customers.'
Microsoft shares are currently losing 3.11% in after hours trading after closing the day's regular trading session at $47.01, down 17 cents. The shares trade in a 52-week range of $35.69 to $50.05.
Nadella, who took over the helm in February last year, has been focusing on cloud-based business services. At the same time, he wants a slimmer and simpler Microsoft. In July, Microsoft announced plan to eliminate up to 18,000 positions over the next year, as part of a restructuring plan to simplify its operations and align the Nokia Devices and Services business with the company's overall strategy. Microsoft acquired Nokia's handset business in April.
For the second quarter ended December 31, 2014, the world's biggest software company reported net income of $5.9 billion or $0.71 per share, compared to $6.6 billion or $0.78 per share for the year-ago quarter.
The latest quarter results include $243 million of integration and restructuring expenses, or a $0.02 per share negative impact, related to both Microsoft's restructuring plan announced in July 2014 and the ongoing integration of the Nokia Devices and Services business. It also includes a $0.04 per share negative impact related to income tax expense resulting from an IRS audit adjustment.
On average, 27 analysts polled by Thomson Reuters expected the company to earn $0.71 per share for the second quarter. Analysts' estimates typically exclude special items.
Redmond, Washington-based Microsoft said revenue for the second quarter rose 8% to $26.47 billion from $24.52 billion in the same quarter last year. Thirty analysts had a consensus revenue estimate of $26.33 billion for the second quarter.
The company's devices and Consumer revenue increased 8% to $12.9 billion in the second quarter. Surface revenue surged 24% to $1.1 billion, driven by Surface Pro 3 and accessories. Office 365 Home and Personal subscribers increased to over 9.2 million, up 30% over prior quarter.
The company sold 6.6 million Xbox video-game consoles during the quarter, dwon from 7.4 million consoles last year. The company generated phone hardware revenue of $2.3 billion during the second quarter by selling 10.5 million Lumia smartphones.
Windows OEM Pro revenue declined 13%, while Windows OEM non-Pro revenue fell 13% in the last quarter of 2014.
Last week, Microsoft showcased Windows 10, the much-awaited new version of its operating system, which will also feature a new browser, code-named 'Project Spartan'.
The company' commercial revenue for the quarter rose 5% to $13.3 billion, commercial cloud revenue up 114% driven by Office 365, Azure and Dynamic CRM Online.
Copyright RTT News/dpa-AFX