Microsoft posted an announced profit of $3.1 billion in the just-ended quarter, swinging into the black a year after hefty charges from writing off mobile phone assets.
The profit in the tech giant’s fourth fiscal quarter was nearly identical to the loss from a year earlier, when it took charges of more than $7 billion to reflect the lower value of the Nokia mobile phone division it had acquired. Revenue dipped to $20.6 billion from $22.2 billion in the same period a year ago.
“This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations,” CEO Satya Nadella said. Nadella told a conference call that “we’re proud of what we achieved and particularly how we are positioned for new growth.”
Overall, the results were better than most forecasts and sparked an after-hours gain of more than 3% for the company, which is seeking to shift its emphasis to cope with declining sales of personal computers.
Under Nadella, Microsoft is trying to reduce its dependence on software sales, and boost its role in services and cloud computing, with some contributions from its Xbox gaming platform and Surface tablets.
Nadella said in a statement that “the Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead.”
Microsoft closed out its fiscal year with a 38% rise in profit to $16.8 billion.
Over the past quarter, Microsoft boosted revenue in its “Productivity and Business Processes” unit which includes Office, the software suite which has been largely moved to the internet cloud. The company’s “Intelligent Cloud” operations also grew, driven by revenue growth from Azure, Microsoft’s platform for business cloud computing.
SAP Confirms Outlook After Strong Q2
German software giant SAP confirmed its full-year targets after strong growth in its cloud business propelled earnings and sales in the second quarter.
SAP said in a statement that net profit soared by 73% to 813 million euros ($894.39 million) in the period from April to June. The increase was partly attributable to the fact that the year-earlier figure had included restructuring costs.
But the increase also reflected a strong operating performance with strong demand for its cloud products pushing up overall revenues by 5.4% to 5.24 billion euros ($5.76 billion). SAP said revenues in its cloud business grew by 30% to 720 million euros ($792.08 million).
“Our momentum couldn’t be stronger,” CEO Bill McDermott said in a telephone news conference. He said SAP was not expecting any impact on its business from Britain’s decision to quit the European Union. And he “confidently” confirmed the group’s full-year targets.
SAP is penciling in cloud revenues of 2.95 billion to 3.05 billion euros ($3.25 billion to $3.36 billion) for the full year and group operating profit of 6.4 billion to 6.7 billion euros ($7.04 billion to $7.37 billion).
In 2015, SAP booked annual cloud revenues of 2.3 billion euros ($2.53 billion) and total group operating profit of 6.35 billion euros ($6.99 billion).
Copyright Agence France-Presse, 2016