Microsoft financial results: Surface continues to rise

In Redmond they have just published their financial results for the last quarter of fiscal year 2015, which, unlike previous periods, come with a negative ending balance, leaving Microsoft with a $2.1bn quarterly loss However, the company's revenues were $22.1bn, and even after discounting direct costs Microsoft is left with a positive gross margin of 14,700 million. What are the losses due to then?

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The main culprit seems to be the discount of 7.500 million of assets in the mobile division, which Satya Nadella announced a few days ago, added to another 780 million that Microsoft recorded as restructuring costs, given the new organizational changes that are being undertaken. "

The key here is that these numbers are not ongoing expenses, but will be applied only once, and if they were not considered, Microsoft would have scored 6.4 billion net profit dollars Below we break down these results by division and product lines.

Surface continues to be the star of the hardware area

Continuing the trend of previous quarters, Surface has once again broken records within Microsoft's financial results. Combined revenue from these devices is already $888 million, an increase of 117%with respect to the same quarter of the previous year (which is the valid comparison, since it eliminates the seasonality effect of each quarter).

A significant part of the credit here goes to the Surface 3, which has helped to maintain the range's sales dynamism with its release a couple of months ago.

Another key figure for Surface is that its annual revenue already exceeds $3.65 billion, an increase of 65 % compared to fiscal year 2014.

Lumia: more sales, but less revenue

As was predicted, the results of the mobile division are mediocre On the one hand there is positive news regarding the volume of smartphones sold, which amount to 8.4 million during this quarter, which implies a growth of 10% compared to the same period of the previous year.

Meanwhile, feature-phones or old phones continue in free fall, as expected, dropping from 30.4 million last year to only 19.4 million during the last quarter.

The worst news is that revenue from sales of Lumia phones continues to fall, reaching a new all-time low since Microsoft bought the Nokia device division. The cause of this is a drop in the average sales price (already reaching $139), a product of the turn toward the low end that Microsoft Mobile has given in the last time.

Because of the shift to the low end, Lumia's average retail price is now $139

The note of hope here is that these figures should improve significantly if the flagships that Microsoft will launch in the coming months manage to a good reception in the market.

In addition, during this quarter the mobile division returned to positive numbers, obtaining a small margin of 10 million dollars (considering only operating costs), slightly better than the loss of 4 million obtained in the last quarter.

Xbox continues to fight, and its sales increase

The Xbox One has had a tough time against the PS4 in the next-gen war, but has so far managed to keep going fighting for the position of winner of this generation. Sales of the Xbox division continue to rise, reaching 1.4 million of units, which implies an increase of 27% compared to the same period of the previous year.

Of course, this figure includes both Xbox One and Xbox 360, since Microsoft still prefers not to publish the broken down data for each generation.

Xbox-related results also rose thanks to higher transaction revenue from Xbox Live (up 58%), and video game sales (up 62%).

The trend continues: fewer licences, more and subscriptions

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Finally, we have the results of the classic cash cows>Windows and Office licenses, and those of cloud businessesthat promise to become the future of the company."

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Here we observe a consolidation of the results of previous quarters. Windows and Office license revenues continue to fall, partly due to the slowdown in the PC market, and partly due to cannibalization>Office 365."

Specifically, commercial Office license revenue decreased by $823 million (18% decrease), and consumer Office license revenue decreased by $330 million. Revenue from Windows licenses decreased by $683 million, representing a drop of 22%with respect to the same period of the previous year.

It should be mentioned that part of the drop in Windows licenses is due to the immediacy of the release of Windows 10, which has This has motivated many vendors to reduce their PC inventories, in order to welcome the flood of new equipment that will arrive in the coming months.

Commercial Office revenue decreases by $823 million. But commercial cloud revenues are growing by almost the same number.

On the other hand, Office 365 already has 15.2 million subscribers in its consumer version, which has translated in an additional 58 million of income during this quarter. And Microsoft's commercial cloud also continues its unstoppable rise, increasing revenue by 88%(832 million dollars) compared to the same period of the previous year. This item includes both Office 365 for business and Microsoft Azure.

And finally, the also remains on the rise as a source of income for the company, although it still does not represent a significant part of the financial results. Search revenue increased by $160 million, or 21%, primarily due to growth in Bing searches, but also due to better profitability of each search.

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