Microsoft sees 10% slump in Q4 profits as PC sales fall

Software titan hits analysts’ projections, disappoints bulls
Microsoft sees 10% slump in Q4 profits as PC sales fall
(AFP/Getty Images)
By Stephen McBride
Tue 27 Jan 2015 12:24 PM

Microsoft suffered a dip in quarterly profit as PC shipments continued to fall and a strong US dollar put pressure on overseas business, Reuters reported.

The company reported $5.86 billion in profit for Q4, compared with $6.56 billion, in Q4 2013. Revenue rose 8 percent to $26.47 billion, following last year's acquisition of Nokia's devices unit.

Although the earnings slide was no more than had been predicted by analysts, it followed months of positive investor feedback as the Redmond-based software company's shares reached 14-year highs.

"While currency is a headwind for Microsoft and other large international companies, we would characterise the headline numbers as good enough, although some bulls may have been hoping for a bigger beat," said FBR Capital Markets analyst Daniel Ives.

Microsoft's chief financial officer, Amy Hood, said the greatest impact was in sales of software licences to business clients, where the majority of the company's revenues come from.

According to Reuters, Microsoft gets almost 75 percent of its revenue from overseas and the majority of this is from commercial licensing.

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