Microsoft posts Q3 2015 financials, admits to Xbox troubles

April 24, 2015 | 12:07

Tags: #cloud #financial #q3-2015 #satya-nadella #xbox-one

Companies: #microsoft

Microsoft has released its latest quarterly financial results, and while it's seen growth in some areas the impact of its continuing Xbox One price cuts are undeniable.

According to the company's latest financial report, its revenue for its third financial quarter of 2015 grew six per cent year-on-year to $21.7 billion. Its gross margin sat at a percentage point higher for the same period, but the company's overall operating income was five per cent lower at $6.6 - the result of, among other things, the strong US dollar and a $190 million restructuring charge as it continues its executive shake-up and works to further integrate the Nokia smartphone subsidiary into the parent company.

'Customers continue to choose Microsoft to transform their business and as a result we saw incredible growth across our cloud services this quarter,' boasted Satya Nadella, chief executive officer, of Microsoft's performance for the quarter. 'Next week at Build we're excited to share more about how we're empowering every individual and organization on the planet to achieve more with the next generation of our platforms.'

While the cloud - up a whopping 106 per cent - and server - up 12 per cent - divisions enjoyed considerable success over the quarter, Microsoft's figures reveal a different story in the consumer-facing arena. The continuing slump in traditional PC sales is clearly visible in the company's report of a 24 per cent drop in revenue from its Device & Consumer Licensing arm, while consumer sales of its Office productivity suite plunged 41 per cent - balanced somewhat, the company argues, by more than half of those customers switching to Office 365 subscriptions instead.

Another big loser for the company is its Xbox division, which has recently been slashing the price of its Xbox One console in order to compete with better-selling rival Sony and its PlayStation 4. Revenue for the quarter dropped 24 per cent, the company admitted, with sales of the console - not reported in absolute figures - sitting lower than the same period last year. Not all was grim, however; in the same segment, sales of the company's Surface tablets shot up with revenue increasing 44 per cent - although, at $713 million still contributing a minority of the company's overall revenue.

Full details are available on Microsoft's investor relations portal.
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