Business

Nadella's first full quarter at Microsoft barely beats revenue predictions, but profits slip

Microsoft chief executive Satya Nadella.

Above: Microsoft chief executive Satya Nadella.

Image Credit: Microsoft

Microsoft kept up its forward march last quarter following the much discussed appointment of chief executive Satya Nadella, barely beating analysts’ estimates of $23 billion in revenue with $23.38 billion but missing expectations for 60 cents in earnings per share with $4.6 billion in net income.

The results come after a strong first quarter with Nadella at the helm.

Changes are coming to Microsoft, in the shape of layoffs and a broad strategic turn toward becoming “the productivity and platform company for the mobile-first and cloud-first world,” in Nadella’s words.

Microsoft will have to keep putting up with Apple and Google in the mobile business. Its acquisition cost the company $692 million in operating income and $0.08 in earnings per share, causing it to miss the profit mark.

And in the cloud world, Google and Amazon Web Services play big roles. Microsoft has its strengths, but Amazon leads the market and Google is coming up quick.

Results of Microsoft’s newest strategic shifts will show up in future earnings reports. For now, things are looking just fine, following a second quarter of 2014 with plenty of announcements (see sidebar).

There is now a new “Phone Hardware” segment to the report which includes all information pertaining to the newly acquired Nokia business.

Kia Kokalitcheva contributed reporting.

More information:

Microsoft Corporation is a public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through ... read more »

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