Lumia letdown: Microsoft phone sales halved in just one year

Analysts were expecting per-share earnings of 71 cents on revenue of $25.2 billion. The company pulled in revenue of $25.7 billion in constant currency, and $0.78 earnings per share.

Microsoft Corporation (NASDAQ:MSFT) stock rose 4.22% after hours yesterday, as it posted earnings beats in its Q2 results.

The revenue Microsoft generated from their cloud business, including the Azure platform used by many businesses for storage and collaboration, was up by 5% to 6.3 billion dollars (£4.3bn), while Azure revenue alone was up by 140%.

This segment, which includes results from Office and Office 365 (commercial and consumer customers), declined 2 percent to $6.7 billion.

The More Personal Computing division was also down 5% from last quarter.

“We delivered double-digit operating income growth in non-GAAP constant currency while investing in key strategic areas that position Microsoft for continued long term growth”, said Amy Hood, executive vice president and chief financial officer of Microsoft. The company only managed to sell 4.5 million Lumias in the last quarter, with revenues down 49 percent year on year.

Microsoft Surface revenue was up 29% year on year, totalling $1.35 billion (about £94m, AU$1.91bn).

Office 365 revenue growth was almost 70 percent in constant currency. The Redmond, Wash., software giant, meanwhile, is inching closer to its goal of attaining a $20 billion annual run rate for its commercial cloud business in the company’s 2018 fiscal year. “Growth in the cloud, especially in premium services, plays to Microsoft’s growing strengths and helps drive other parts of the portfolio-like Enterprise Mobility”.

Global shipments of new PCs declined 8.3 percent during the fourth quarter compared with a year earlier, the research firm Gartner recently reported. Xbox Live monthly active users increased 30% year over year to reach a new record of 48 million.

The release of two flagship Lumia 950 handsets appears to have done little to reverse the fortunes of Windows Phone, Digital Spy reports. This division includes the Windows operating system, Microsoft’s Surface devices and smartphones and search advertising revenue.