Microsoft’s weak earnings put its massive layoffs in context

July 22, 2014
July 22, 2014
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Microsoft just reported revenue for the June quarter of $23.38 billion, stronger than most analysts had forecasted. Net income was $4.6 billion, or $0.55 per share, weaker than consensus forecasts. The stock is gyrating in after hours trade. It’s had a dream run recently, hitting its highest levels since the dot com boom this week.

As we’ve pointed out, the company is transitioning into a world dominated not by PCs but by mobile devices, a world in which it is no longer the incumbent, but a challenger. And the company just confirmed that the Nokia device business CEO Steve Ballmer bought for $7.2 billion lost nearly $700 million last year.

The earnings come just days after the Redmond, Washington-based software giant announced it would let go of some 18,000 workers —the biggest layoffs in its history. On the upside, Microsoft’s commercial cloud business continues to boom, with revenue rising by 147% from a year earlier, putting it on track to become a $4 billion-a-year business. Commercial licensing, Microsoft’s biggest business, grew by 11%  and the company noted continued “business PC growth in developed markets.”

 

 

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