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By Bill Rigby SEATTLE (Reuters) - Microsoft Corp on Monday reported a fall in its quarterly profit that was in line with Wall Street forecasts, as sluggish personal computer sales dampened demand for Windows software and the company struggled with the impact of the strong U.S. dollar. "While currency is a headwind for Microsoft and other large international companies, we would characterize the headline numbers as good enough, although some bulls may have been hoping for a bigger beat," said Daniel Ives, an analyst at FBR Capital Markets. Microsoft's flagship Windows business has been under pressure for three years as PC sales have declined, although the market appears to be stabilizing in recent months. Currency shifts against the strong U.S. dollar also crimped profit in the fiscal second quarter, ended Dec. 31, although Microsoft did not specify by how much.
Microsoft on Monday reported that its quarterly profit dipped as revenue increased with help from sales of Surface tablets, Xbox One consoles and cloud services. Profit fell 10 percent from a year ago to $5.9 billion while revenue hit $26.5 billion in the quarter ended on December 31, and chief executive Satya Nadella said the company's transformation is on target. Microsoft shares were down slightly more than three percent to $45.53 in after-market trading that followed release of the earnings figures. In the recently ended quarter, revenue from business cloud services including Office 365 and Azure more than doubled to hit an annualized rate of $5.5 billion.