Microsoft Posts $3.2B Loss on Phone Business Write-Down
Microsoft (MSFT) reported a $3.2 billion quarterly net loss, hurt by charges related to its Nokia phone business and job cuts, and weak demand for its Windows operating system.
The company took a charge of $7.5 billion in the fourth quarter related to the restructuring of its Nokia handset business, which it acquired last year.
Microsoft's shares fell 3.5 percent to $45.65 in extended trading on Tuesday.
Under chief executive Satya Nadella, the company has shifted its focus to software and cloud services as demand for its once-popular Windows operating system slows.
Sales of Windows to computer manufacturers to install on new PCs fell 22 percent in the quarter. The company is scheduled to roll out Windows 10 on July 29, a much-awaited launch after a lackluster response to Windows 8.
Revenue from its commercial cloud business, which includes offerings such as Office 365 and Azure, rose 96 percent, excluding the impact of a strong dollar.
Microsoft said this month that it would cut 7,800 jobs, or nearly 7 percent of its workforce, mainly in the phone hardware business.
The company reported a net loss of 40 cents a share for the quarter ended June 30. Microsoft reported net income of $4.61 billion, or 55 cents a share, a year earlier.
Microsoft recorded total impairment, integration and restructuring expenses of $8.4 billion including the charges related to the Nokia phone business.
Excluding the charges, Microsoft earned 62 cents a share.
Revenue fell 5 percent to $22.18 billion.