{"id":7527,"date":"2013-07-19T10:08:39","date_gmt":"2013-07-19T09:08:39","guid":{"rendered":"http:\/\/www.itwriting.com\/blog\/?p=7527"},"modified":"2013-07-19T10:08:39","modified_gmt":"2013-07-19T09:08:39","slug":"microsoft-financials-nearly-a-billion-lost-on-surface-rt-but-prospering-in-server-and-cloud","status":"publish","type":"post","link":"https:\/\/www.itwriting.com\/blog\/7527-microsoft-financials-nearly-a-billion-lost-on-surface-rt-but-prospering-in-server-and-cloud.html","title":{"rendered":"Microsoft financials: nearly a $billion lost on Surface RT but prospering in server and cloud"},"content":{"rendered":"

Microsoft has reported fourth quarter and full year results for its financial year ending June 30th 2013.<\/p>\n

I am in the habit of tracking the results quarter by quarter with a simple table:<\/p>\n

Quarter ending June 30th 2013 vs quarter ending June 30th 2012, $millions<\/em><\/p>\n\n\n\n\n\n\n\n\n
Segment<\/td>\nRevenue<\/td>\nChange<\/td>\nProfit<\/td>\nChange<\/td>\n<\/tr>\n
Client (Windows + Live)<\/td>\n4411<\/td>\n+259<\/span><\/span><\/td>\n1099<\/td>\n-1323<\/font><\/span><\/span><\/td>\n<\/tr>\n
Server and Tools<\/td>\n5502<\/td>\n+452<\/td>\n2325<\/td>\n+285<\/td>\n<\/tr>\n
Online<\/td>\n804<\/td>\n+69<\/td>\n-372<\/span><\/td>\n+6300<\/font><\/span><\/td>\n<\/tr>\n
Business (Office)<\/td>\n7213<\/td>\n+889<\/font><\/span><\/td>\n4873<\/td>\n+745<\/font><\/span><\/td>\n<\/tr>\n
Entertainment and devices<\/td>\n1915<\/td>\n+134<\/span><\/span><\/td>\n-110<\/font><\/span><\/span><\/td>\n-142<\/font><\/span><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

What is notable in the figures? Windows profits are down, not so much due to declining PC sales but rather this:<\/p>\n

\n

These financial results include a $900 million charge, or a $0.07 per share impact, related to Surface RT inventory adjustments.<\/p>\n<\/blockquote>\n

That said, Microsoft reports that after adjusting for deferred revenue, Windows client decreased 6% quarter on quarter and 1% for the full year, so the PC decline is having an impact.<\/p>\n

Business, which includes Office, SharePoint and Office 365, is performing well and the company reports $1.5 billion annual revenue for Office 365.<\/p>\n

Server and Tools (almost all Server) continues to shine:<\/p>\n

\n

Server & Tools revenue grew 9% for the fourth quarter and 9% for the full year, driven by double-digit percentage revenue growth in SQL Server and System Center.<\/p>\n<\/blockquote>\n

Even Online, which is essentially Bing-related advertising income, is showing signs of life, despite yet another loss:<\/p>\n

\n

Online Services Division revenue grew 9% for the fourth quarter and 12% for the full year, driven by an increase in revenue per search and volume. Bing organic U.S. search market share was 17.9% for the month of June 2013, up 230 basis points from the prior year period.<\/p>\n<\/blockquote>\n

Windows Phone is hidden in Entertainment and Devices, which reported a loss despite $1.9 billion revenue. Microsoft says:<\/p>\n

\n

Windows Phone revenue, reflecting patent licensing revenue and sales of Windows Phone licenses, increased $222 million.<\/p>\n<\/blockquote>\n

This means that Xbox is slightly down but overall revenue slightly up thanks to Windows Phone. <\/p>\n

Overall both revenue and profit are a little higher than the previous year.<\/p>\n

Losing a billion dollars on Surface RT is careless. Put simply, Microsoft ordered far too many of its experimental new ARM-based version of Windows, at a time when few new-style apps were available. I do not regard this as proof that the entire concept was wrong, though it is a significant mis-step however you spin it. See further post coming shortly.<\/p>\n","protected":false},"excerpt":{"rendered":"

Microsoft has reported fourth quarter and full year results for its financial year ending June 30th 2013. I am in the habit of tracking the results quarter by quarter with a simple table: Quarter ending June 30th 2013 vs quarter ending June 30th 2012, $millions Segment Revenue Change Profit Change Client (Windows + Live) 4411 … Continue reading Microsoft financials: nearly a $billion lost on Surface RT but prospering in server and cloud<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[586,882,996],"class_list":["post-7527","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-microsoft","tag-surface-rt","tag-windows"],"_links":{"self":[{"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/posts\/7527","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/comments?post=7527"}],"version-history":[{"count":0,"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/posts\/7527\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/media?parent=7527"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/categories?post=7527"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itwriting.com\/blog\/wp-json\/wp\/v2\/tags?post=7527"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}