Microsoft is scheduled to report quarterly earnings Thursday afternoon, and analysts expect the company to post earnings per share of 58 cents on revenue of $20.96 billion. In the same quarter previous year, Microsoft reported earnings of 54 cents a share on $23.2 billion.
Revenue fell more than 12 percent from a year earlier to $20.4 billion, though profit grew nearly 2 percent to $4.62 billion.
Microsoft saw a 12 percent year-over-year decline in revenue during the quarter ended September 30, 2015.
New Reporting Segments The Q1 2016 results were reported for the first time in Microsoft’s new format. The three reporting segments into which Microsoft is now divided are: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
Revenue of $21.66 billion non-GAAP versus $21.03 billion estimated.
That decline continues a trend seen last quarter, when revenue shrunk 5% from the previous year.
Revenue from Intelligent Cloud rose 8% on an absolute basis, and 14% in constant currency, to $5.9 billion.
As part of the restructuring effort announced by Microsoft a year ago, the company said it planned to lay off about 18,000 employees.
Microsoft also has worked hard at improving its devices business.
Overall, Microsoft’s server and cloud sales rose by 13 percent year-over-year, taking into account the company’s constant-currency calculations.
Under Nadella, Microsoft has been shifting to offer more services through the Internet cloud to adapt to a new landscape in which mobile devices have become more important.
Microsoft said revenue from its Azure cloud service more than doubled, while revenue from Office 365, the cloud version of its popular productivity software, jumped almost 70%. By building Cortana, Microsoft’s personal digital assistant powered by Bing, directly into Windows 10, Microsoft is automatically increasing the number of Bing searches. In terms of earnings, Microsoft reported that its phone unit revenues fell 54 percent over the past quarter - in keeping, it said, with Nadella’s strategy to limit the size of that unit, which it purchased from Nokia. It said Azure cloud computing saw its revenue and “compute stage” more than double from the prior-year period. Also, the Surface Pro 4 came out this month. Xbox Live’s monthly users increased 28% YoY to 39 million.DISCLOSURES: Stifel Nicolaus and FBR Capital Markets act as market makers for Microsoft.
