Ouch… Microsoft only sold 4.5 million Lumia phones last fiscal quarter

Revenue from the “intelligent cloud” business, which includes products such as its Azure cloud infrastructure and services business along with other noncloud products such as traditional servers, rose 5 per cent to $6.3 billion. But during the earnings call, Nadella and other Microsoft execs stressed the success of the company’s cloud computing platform, Azure, and productivity software, Office 365-both of which showed significant growth.

Microsoft beat Wall Street’s estimates for sales in key segments.

All of its businesses combined, Microsoft collected $25.7 billion in revenue (non-GAAP) during the quarter. On the flip side, the launch of the Surface Pro 4 and Surface Book saw Surface revenue grow by 29 percent in constant currency.

Office 365 revenue grew 70 percent and the platform’s consumer subscribers increased to a total of 20.6 million.

Under his leadership, Microsoft has been shifting its business towards cloud services, such as Microsoft Azure, Dynamics CRM and Office 365. In short, Microsoft has found some firm footing in the competitive cloud computing market.

The Xbox business was bolstered by the October release of Halo 5, the first new title since 2012 in Microsoft’s most successful game franchise.

Although Microsoft said Xbox hardware revenue fell because of lower volumes of Xbox 360 sales, it wouldn’t get specific about the number of next-generation consoles it sold during the recent quarter.

Since assuming the CEO role in February 2014, Microsoft CEO Satya Nadella has been pushing the company to adapt to a world where people are increasingly using mobile gadgets in addition to PCs, and where businesses are moving more of their operations online. The company only managed to sell 4.5 million Lumias in the last quarter, with revenues down 49 percent year on year.

However, revenue from smartphones was down 49pc, raising fresh questions about Microsoft’s plans for the future of its Lumia devices, which it inherited when it acquired Nokia’s handset business for $7.2bn; an acquisition it acknowledged was a failure.

Right after Microsoft reported its better-than-expected performance for the previous quarter, its stock price jumped by more than 7 percent. On the positive, the company’s cloud business keeps growing, giving investors hope that Microsoft will remain relevant for years to come.

The Redmond, Washington-based tech giant reported net income in the fourth quarter of $5 billion, down 15% from the year-ago period.