“Our business was impacted by the $7.5B Nokia write-down”

Jul 22, 2015 04:23 GMT  ·  By

Microsoft has recently announced its financial results for FY2015 Q4, revealing a loss of $2.1 billion and revenues of $22.2 billion for the period.

Redmond explains that its results were impacted by the $7.5 billion write-down of Nokia’s Devices and Services unit, as the company says that a restructuring charge of $780 million was also needed.

“There was also a charge of $160 million related to the previously announced integration and restructuring plan. Combined, these items totaled $8.4 billion or a $1.02 per share negative impact. Excluding this impact, operating income and EPS would have been $6.4 billion and $0.62, respectively,” Microsoft explains, trying to point out that its results would have been way better without the write-down.

Windows Phone revenues collapse

Specifically, both the Devices and Consumer and Windows OEM revenues dropped during Q4, with Microsoft’s figures showing a decline of 13 percent and 22 percent, respectively. Surface revenue, however, skyrocketed and posted an increase of 117 percent to $888 million, mostly thanks to the Surface Pro 3.

Windows Phone sales, on the other hand, collapsed, as official revenue data reveals a drop of 68 percent in Q4. Microsoft says that it actually sold more phones during the period - 8.4 million - but since most of them were in the budget business, revenues remained very low.

Microsoft’s CEO Satya Nadella, however, sees the glass half full and says that it’s a good thing that some divisions posted such big increases and explains that the upcoming arrival of Windows 10 creates more opportunities for growing stronger in all businesses where revenues are dropping.

“Our approach to investing in areas where we have differentiation and opportunity is paying off with Surface, Xbox, Bing, Office 365, Azure and Dynamics CRM Online all growing by at least double-digits,” discloses Satya Nadella, chief executive officer at Microsoft. “And the upcoming release of Windows 10 will create new opportunities for Microsoft and our ecosystem.”

Windows 10 is projected to launch on July 29, but it’s highly unlikely to have such a big impact on Windows revenues because it’ll be offered free of charge to those on genuine Windows 7 or 8.1.