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Surface Revenue Continues To Decline For Microsoft

Microsoft have surpassed expectations in their latest quarterly earnings report, reporting $23.3 billion in revenues and $6.5 billion in net income.

“Innovation across our cloud platforms drove strong results this quarter,” said Satya Nadella, chief executive officer at Microsoft,

“Customers are looking to Microsoft and our thriving partner ecosystem to accelerate their own digital transformations and to unlock new opportunity in this era of intelligent cloud and intelligent edge.”

The company saw gains when it came to software, with their Productivity and Business Processes division growing revenues 21% and the Intelligent Cloud division grew 11%.

LinkedIn contributed in $1.1 billion in revenue for the quarter, whilst the company’s hardware-focused division continued to flag.

More Personal Computing reported $8.8 billion in revenue, with gains in OEM, Cloud Services, Gaming and Search revenue.

However, these gains were floored by a 2% decrease in Surface revenues – which Microsoft attribute to “product lifecycle transitions.”

This considerable setback saw the division’s total growth stall and declining 2%.

 

Still, overall, the company’s revenues were up 13% year-over-year. While a lot of the trends expressed in the previous quarter (such as the ongoing decline of Surface revenue) had an impact, Microsoft’s recent restructuring also played a significant role.

“During the fourth quarter of fiscal year 2017, we recorded $306 million of employee severance expenses primarily related to our sales and marketing restructuring plan. During the fourth quarter of fiscal year 2016, we recorded $630 million of asset impairment charges related to our phone business. We also recorded $480 million of restructuring charges, including employee severance expenses and contract termination costs, primarily related to our phone business restructuring plans.”

Despite this, Amy Hood, executive vice president and chief financial officer at Microsoft, says that the company “delivered a strong finish to the year with 30% growth in commercial bookings this quarter.”

“We will continue to invest in key areas that drive future growth for Microsoft and our customers,” she says.

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