Microsoft profit slips slightly


Published: Monday 26th January 2015 by The News Editor

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Technology giant Microsoft saw its operating profit fall slightly in the final quarter of 2014.

Figures released by the firm behind Windows saw operating income drop from 7.9 billion US dollars (£5.2 billion) to 7.7 billion (£5.1 billion) compared to the same period last year.

But the Seattle-based computer giant saw revenue increase by 8% on the previous year to 26.5 billion US dollars (£17.5 billion) – slightly above analyst forecasts. Operating profit also rose compared to the last quarter.

Microsoft explained some of the reported net income drop of 10% on last year’s figures by referring to “243 million dollars of integration and restructuring expenses”, related to the acquisition of the Nokia phone business that took place last year.

Microsoft chief executive Satya Nadella said: “Microsoft is continuing to transform, executing against our strategic priorities and extending our cloud leadership. 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.”

This year is already looking like a potential turning point for the software giant, with the new version of their desktop software Windows being released in the form of Windows 10. In recent years the Bill Gates-founded company has come under increasing pressure from the likes of Apple and Google, which have overtaken Microsoft in various areas of the market.

The increasing popularity of Microsoft’s hybrid table the Surface, which comes with a detachable keyboard and power similar to a laptop, has seen previous slumps begin to slow. Surface tablet revenue grew by 8% in the final quarter of 2014 to 12.9 billion US dollars (£8.5 billion), and subscriptions to productivity software Office 365 also went up by 30% on the previous quarter.

Amy Hood, executive vice president and chief financial officer of Microsoft, said: “We remain disciplined in our approach to operational and execution excellence, balanced with investments that drive meaningful growth for the business while increasing capital return to shareholders.”

Microsoft also confirmed what it called “strong” Christmas season sales for its video games console, the Xbox One, with Xbox sales totalling 6.6 million units over the last three months as the hardware continues to battle against Sony’s Playstation 4.

The figures suggest the Xbox has outsold the Playstation over the quarter, with Sony announcing sales of around five million between October and January, but the Playstation is still the bigger-selling system overall.

At the live event to unveil Windows 10 last week, Microsoft revealed a new augmented-reality headset; HoloLens, for the first time, though no release date was offered.

Windows 10 does not yet have an official launch date, but a positive response from critics suggest it could fuel growth in the future for the technology giant.

Microsoft rival Apple is due to announce its financial results for the final quarter of 2014 tomorrow, with company records expected to be set following record sales of the iPhone 6 and 6 Plus, which launched in September.

Published: Monday 26th January 2015 by The News Editor

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