Microsoft Corporation (NASDAQ:MSFT) to Narrow Focus on Phones Business on Record Quarter Loss


Dallas, Texas 07/22/2015 (Financialstrend) – Microsoft Corporation (NASDAQ:MSFT) posted its biggest ever quarterly loss of $3.2 billion, mostly hurt by the $7.5 billion writedown of its flopped Nokia purchase.  The company’s hardware business has been on a rollercoaster forcing the company to cut up to 7,800 jobs as part of a cost-saving strategy. The write-down of the troubled Nokia’s cellphone business might be a big blow, but not expected to diminish the company’s huge cash board.

Change of Focus

Excluding all the losses as a result of the flopped Nokia purchase as well as costs related to the job cuts, Microsoft Corporation (NASDAQ:MSFT) profits came in at 62 cents a share higher than the street’s estimates of 58 cents a share.  This is despite revenues coming in at $22.1 billion representing a 5.1% drop.

Microsoft Corporation (NASDAQ:MSFT) will narrow its focus on mobile according to CEO Satya Nadella on the Nokia deal failing to rescue the company’s languishing smartphone business. The company’s cloud computing business continues to perform better consequently expected to be a point of focus going forward. Cloud revenue was up by 88% as sales from cloud programs soared by 36% to $3.08 billion.

 Concerns over Windows and Office Business

 Windows and Office business showing signs of weakness should be a point of concern as the two were expected to play an important role in the push for growth.  Revenues from the two divisions were down by 7% coming in at $10.5 billion in line with analysts’ estimates.

However, weakness on this segment continues to be offset by strong growth in the cloud services businesses as well as Xbox games and surface tablets.  A decline in PC sales globally meant Window’s installation in machines was always going to be a disappointment having dropped by 22%. Microsoft Corporation (NASDAQ:MSFT) is letting people upgrade to the latest Windows OS for free and in return selling to them add-ons like PC video games, Office and web search ads, to make up for the lost revenue.