Microsoft
profit falls on sluggish Windows, currency pressure
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[January 27, 2015]
By Bill Rigby
SEATTLE (Reuters) - Microsoft Corp on
Monday reported a fall in its quarterly profit that was in line with
Wall Street forecasts, as sluggish personal computer sales dampened
demand for Windows software and the company struggled with the impact of
the strong U.S. dollar.
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Shares of the world's largest software company, which have surged to
14 year highs in the past few months, fell 3 percent in after-hours
trading, to $45.63.
"While currency is a headwind for Microsoft and other large
international companies, we would characterize the headline numbers
as good enough, although some bulls may have been hoping for a
bigger beat," said Daniel Ives, an analyst at FBR Capital Markets.
Microsoft's flagship Windows business has been under pressure for
three years as PC sales have declined, although the market appears
to be stabilizing in recent months.
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Currency shifts against the strong U.S. dollar also crimped profit
in the fiscal second quarter, ended Dec. 31, although Microsoft did
not specify by how much. Microsoft gets almost three-quarters of its
revenue from overseas, but a significant amount of that is still in
U.S. dollars.
"Overall, the only surprise I think was in commercial licensing,
where we had a little bit of a headwind from foreign exchange as
well as macro conditions in China and Japan," the company's chief
financial officer, Amy Hood, said in a phone interview with Reuters.
Commercial licensing is chiefly sales of Windows and Office to
business customers, which is Microsoft's biggest revenue generator.
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Microsoft reported profit of $5.86 billion, or 71 cents per share
for the latest quarter, compared with $6.56 billion, or 78 cents per
share, in the year-ago quarter.
Sales rose 8 percent to $26.47 billion, largely due to the
acquisition of Nokia's phone handset business last year.
Analysts had expected revenue of $26.3 billion and earnings of 71
cents per share, on average, including some restructuring costs.
(Reporting by Bill Rigby; Editing by Meredith Mazzilli, Marguerita
Choy and Leslie Adler)
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