Microsoft has missed earnings estimates for the third quarter of its fiscal year as the company's mobile platform continues its freefall into oblivion.
Total revenue in Q3 fell from $21.73bn to $20.53bn, while income fell to $3.76bn from almost $5bn the previous year.
Microsoft showed losses in two of its three businesses, confounding analysts who had expected Azure growth to be in the region of seven to nine per cent. In reality, growth was just three per cent despite revenue more than doubling.
The Intelligent Cloud business blamed its lower revenues on a reliance on products that weren't part of the main offer, such as servers.
The firm's productivity and business processes group dropped seven per cent, while revenue grew one per cent to $6.5bn.
That said, the commercial cloud sector (Azure and Office 365) is doing OK and hit the $10bn revenue mark in the quarter. Azure revenue was up 120 per cent and the use of Azure compute and Azure SQL database doubled year over year
Microsoft chief executive Satya Nadella used the results as a chance to be positive about the situation, claiming that companies see Microsoft as an ideal partner for digital transformation efforts.
“Organisations using digital technology to transform and drive new growth increasingly choose Microsoft as a partner,” he said. “As these organisations turn to us, we’re seeing momentum across Microsoft’s cloud services and with Windows 10.”
However, this can't hide problems in the firm's consumer division. Surface devices are the saving grace, seeing revenue up $1.1bn on the quarter and sales up over 60 per cent year on year.
However, Microsoft's smartphone business suffered badly after Lumia sales fell by a whopping 73 per cent. Only 2.3 million Lumia phones were sold in the quarter, and remember that this figure also includes the old-school 'dumbphones' that Microsoft acquired and still churns out for £20 as second handsets and developing world devices.
PC sales were down, but by only two per cent this time, which is surprising seeing as the company is still in the 'give it away, screw 'em once and you got 'em' phase of the Windows 10 rollout.
Apparently, most of the action from consumers came from the high-end as well, meaning that OEMs are getting more revenue per machine.
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