Microsoft shares dip on device sales drop

SAN FRANCISCO • Microsoft slightly missed Wall Street's average revenue estimate for the latest quarter on Thursday, as sales of its Surface tablets and laptops slumped in the face of revamped competition in the personal computer market.

Shares of the world's largest software company fell 0.6 per cent to US$67.85 in trading after the bell.

Under chief executive Satya Nadella, who took the helm in 2014, Microsoft has sharpened its focus on the fast-growing cloud computing unit to counter a prolonged slowdown in the PC market, which has weighed on demand for its Windows software.

That transition remained on track, with cloud margins improving and the company's annual commercial cloud revenue run rate reaching US$15.2 billion (S$21.2 billion), a 50 per cent year-on-year improvement. It marks good progress towards its goal of pushing the figure to US$20 billion by 2020.

Mr Nadella said Microsoft reached 100 million monthly active users for Office 365 commercial, the firm's flagship cloud productivity software, the first time Microsoft has given such a figure.

For the fiscal third quarter ended March 31, overall revenue on an adjusted basis climbed 6 per cent to US$23.56 billion. Revenue from Microsoft's personal computing unit, its largest by revenue, fell 7.4 per cent to US$8.84 billion.

Surface revenue plunged 26 per cent to US$831 million, down from US$1.3 billion in the year-ago quarter.


A version of this article appeared in the print edition of The Straits Times on April 29, 2017, with the headline 'Microsoft shares dip on device sales drop'. Print Edition | Subscribe