Microsoft’s fourth quarter earnings report is in. The company posted $19.9 billion in revenue for the last three months ending on June 30, falling short of Wall Street’s $20.73B expectations by a nice chunk. Microsoft’s EPS for the quarter was 66 cents, also falling short of Wall Street’s estimated 75 cents EPS. The report blames the declining PC market as well as increased production and inventory costs for its line of Surface tablets – which themselves haven’t been very successful. There was a bit of good news for Microsoft today though, with Google also falling short of expectations with its Q2 earnings.
Microsoft chief operating officer Kevin Turner noted that the company sees a strong future for itself in the service market, particularly with cloud storage. “We continue to see strong demand for our enterprise products and services, with more and more customers making long-term commitments to the Microsoft platform,” he said. “The growing adoption of our cloud services, including Office 365, Windows Azure and Dynamics CRM, continues to demonstrate our leadership position in the cloud.”
The company’s entertainment and devices division (EDD) noted an 8-percent increase in revenue, or a $134 million bump, but said that it noticed lower Xbox 360 revenue. One million Xbox 360 units were shipped during the quarter, down from 1.1 million devices during the fourth quarter of last year. Similarly, its Windows Phone department reported a $222 million bump in revenue, largely due to Microsoft’s established patent licensing agreements and sales of Windows Phone licenses.
Microsoft’s stock took an immediate hit following the announcement, dropping by five percent in after hours trading.