Home Business Microsoft Profits Beat Expectations Despite Nokia Drag

Microsoft Profits Beat Expectations Despite Nokia Drag


24 OCT 2014– Microsoft has reported a fall in profits as a result of costs related to job cuts and its purchase of Nokia’s smartphone business earlier this year.

The software giant made $4.5bn (£2.8bn) in the three months to September, 13% lower than the same time last year.

“Integrations and restructuring expenses” cost $1.1bn, Microsoft said.

But the new Nokia business also boosted revenues. They climbed 25% to $23.2bn, beating expectations and sending shares higher in after-hours trading.

Cost cutting

In July Microsoft announced plans to cut 18,000 jobs, including 12,500 in the Nokia unit it bought in April.

On Wednesday Microsoft said it would no longer use the Nokia name, selling future Lumia smartphone models as Microsoft-branded phones.

In a statement accompanying earnings, Microsoft boss Satya Nadella said the company was being “positioned for future growth”.

“Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organisation,” he said.

Microsoft makes most of its money selling software to companies. The results show a strong growth in its business selling cloud computing to companies – an area Mr Nadella has cited as important for the future of Microsoft.

But the business has continued to place great importance on its consumer products like the Xbox games console, its Surface range of tablet computers, and smartphones.

Stronger sales of phones and tablets helped boost revenues, with total consumer revenue up 47%.

Source: BBC


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