Microsoft reports Q4 revenues of US$19.9bn – takes a US$900m hit on Surface RT inventory

19 Jul 2013

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Steve Ballmer, CEO of Microsoft

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Software giant Microsoft has reported fourth-quarter revenues of US$19.9bn, up 10pc on last year. The revenues would have been higher if not for the fact the company has admittedly taken a hit of US$900m due to poor Surface RT sales.

The results were also affected by US$782m worth of deferred revenue related to the Office upgrade offer.

The company reported a profit of US$4.97bn for the fourth quarter.

For the full year, Microsoft’s revenues were US$77.8bn, yielding a profit of US$26.76bn.

“We are working hard to deliver compelling new devices and high-value experiences from Microsoft and our partners in the coming months, including new Windows 8.1 tablets and PCs,” said Steve Ballmer, chief executive officer at Microsoft.

“Our new products and the strategic realignment we announced last week position us well for long-term success, as we focus our energy and resources on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value the most.”

Sticking to the knitting?

Microsoft’s chief financial officer Amy Hood suggested Microsoft is likely to stick at what it does best – software.

“While our fourth-quarter results were impacted by the decline in the PC market, we continue to see strong demand for our enterprise and cloud offerings, resulting in a record unearned revenue balance this quarter. We also saw increasing consumer demand for services like Office 365, Outlook.com, Skype, and Xbox LIVE,” she said.

“While we have work ahead of us, we are making the focused investments needed to deliver on long-term growth opportunities like cloud services.”

Revenues at Microsoft’s Business division grew 14pc in the fourth quarter and the company’s Server & Tools division grew revenue 9pc.

The Windows division grew 6pc in the fourth quarter. In June, Microsoft released the public preview of Windows 8.1 which will be made available to OEMs in August.

Microsoft’s Entertainment and Devices division grew 8pc in the fourth quarter, boosted by transactional revenue on Xbox LIVE which was up 20pc. The company unveiled its next-generation console Xbox One in May and this is expected to ship around October in time for the Christmas sales season.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com