Software giant Microsoft has incurred losses of US$2.05bn on fourth quarter revenues of US$22bn, which the company attributed to the costs associated with the US$7.5bn writedown for its acquisition of Nokia Devices as well as restructuring charges of US$780m.
Microsoft also blamed its poor fourth quarter results on the strengthening of the US dollar.
There was also a further charge of US$160m associated with the company’s restructuring.
The losses are mounting up just ahead of the company’s big launch of its Windows 10 operating system on 29 July, which it hopes to see installed on 1.5bn devices in the next three years.
Prelude to Windows 10
As part of the prelude to Windows 10, original equipment manufacturers (OEMs) have been holding back spending on Windows, which saw OEM revenue decrease by 22pc. The end-of-support refresh cycle for XP was also a factor.
Total Xbox revenue, however, grew 27pc based on strong demand for consoles.
Search advertising revenue grew 21pc, with Bing market share at 20pc in the US.
Office 365 consumer subscribers increased to 15.2m, with 3m subscribers added in the second quarter.
Commercial cloud revenue grew 88pc, driven by Office 365, Azure and Dynamics CRM Online.
Server and products revenue were also up 4pc.
Differentiation and opportunity
“Our approach to investing in areas where we have differentiation and opportunity is paying off, with Surface, Xbox, Bing, Office 365, Azure and Dynamics CRM Online all growing by at least double digits,” said Satya Nadella, chief executive officer at Microsoft.
“And the upcoming release of Windows 10 will create new opportunities for Microsoft and our ecosystem.”
For the fiscal year so far Microsoft’s revenues stood at US$93.6bn and the company has so far yielded an operating income of US$18.2bn.
“In our commercial business we continue to transform the product mix to annuity cloud solutions and now have 75,000 partners transacting in our cloud,” said Kevin Turner, chief operating officer at Microsoft.
“We are also expanding the opportunity for more partners to sell Surface, and in the coming months will go from over 150 to more than 4,500 resellers globally.”