Microsoft Q2 profits fall but revenues bolstered by strong cloud and tablet sales

Windows 10: Microsoft 'taking bold steps' with its new OS
Windows 10: Microsoft 'taking bold steps' with its new OS

Microsoft has reported a 11% year-on-year plummet in profits for the last three months of 2014, with net income down to $5.86bn (£3.88bn), although sales were up 8% to $26.6bn.

While earnings were up, Microsoft was hit by costs associated with restructuring and tax adjustments.

Its strong sales performance saw revenues bolstered by cloud services, which achieved "triple-digit" 114% revenue growth thanks to strong performance from Office 365, Azur and Dynamic CRM Online.

Sales of Microsoft's Surface tablet hardware grew 24% to $1.1bn, driven mostly by "Surface Pro 3 and accessories".

Microsoft’s Windows 10 operating system was also singled out as a key part in the company’s vision.

Satya Nadella, Microsoft’s chief executive, said: "We are taking bold steps forward across our business, and specifically with Windows 10, to deliver new experiences, new categories, and new opportunities to our customers."

The company will also hope that innovative tech such as its recently announced HoloLens hologrammatic headset will help drive it forward.

But sales of Xbox gaming consoles fell during the three months, with revenues down 20%, and sales of 6.6 million units during the Christmas period.

The results included the $243m cost of integrating and restructuring in relation to its acquisition of Nokia’s handsets business.

Start Your Free 30-Day Free Trial

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.com, plus get exclusive discounts to Campaign events.

Become a subscriber

GET YOUR CAMPAIGN DAILY FIX

Don’t miss your daily fix of breaking news, latest work, advice and commentary.

register free