Microsoft, which just announced the biggest job cuts in company history, reported profit that fell short of estimates in the fiscal fourth quarter, weighed down by the acquisition of Nokia Oyj's handset business.
Net income in the period that ended June 30th was $4.61 billion, or 55 cents a share, on sales of $23.4 billion, Microsoft said in a statement today.
Analysts were projecting profit of 60 cents and revenue of $23 billion, according to an average of estimates. Excluding results from Nokia, profit would have been 63 cents a share, compared with an average prediction for 64 cents, based on estimates.
Chief executive officer Satya Nadella, who took over in February, is struggling to make Microsoft's smartphones and tablets more appealing for consumers. The results underscore the challenges facing Nadella as he contends with a PC market that's on track to shrink for a third straight year in 2014.
“In consumer [markets] you are still trying to build services and demand for products,” said Colin Gillis, an analyst at BGC Partners in New York, who recommends holding the shares. Microsoft shares fell in extended trading following the report. They were little changed at $44.83 at the close in New York.
The stock climbed 1.7 per cent last quarter, compared with a 4.7 per cent increase in the Standard and Poor’s 500 index. In addition to a plan to cut 18,000 jobs as the company integrates Nokia’s handset unit, acquired in April, Nadella has discontinued unpromising products and placed more emphasis on cloud-computing software delivered via the web. - Bloomberg
