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While revenue was up 8% from the same three months one year ago, net income dropped by 10%. Nevertheless, sales of its tablet Surface and the cloud computing business were two bright spots.
Microsoft reported $26.46 billion in revenue during its latest quarter. The software maker’s profit fell from the same quarter a year ago to $5.86 billion equal to 71 cents a share. That was compared to last year’s profit for the same quarter of $6.56 billion.
There was little promise in its Device and Consumer Licenses sector with $4.2 billion in revenue from consumer licensing a decline of 25% from the same period a year ago.
This includes monies generated by selling consumer Office 2013, Windows OS to OEMs and Windows Phone license revenue.
Microsoft attributed the drop to a slow PC market for Japan, where its Office is attached with PCs, as well as the expanding transition to versions of Office for cloud.
Microsoft explained as well that it planned to have lower revenue for its less expensive Windows devices. The company’s intention is drive growth in the platform, said Amy Hood the CFO.
More devices that are sold currently will increase device that make a free upgrade to the Windows 10 when that new OS becomes available.
Experts believe that the rockiness at this point is expected with Chief Executive Officer Satya Nadella’s many changes just beginning to take hold.
The transitional period is taking place for Microsoft, said on industry analysts with Nadella’s changes only beginning to fall into place. The new product is still not here: Windows 10 is at least six months away from its delivery.
Not all the news from Redmond, Washington is bad. Hardware enjoyed a successful quarter with revenue of more than $1.1 billion, which represented a jump of 24% over the preceding quarter of $900 million.
Record numbers of Lumia Window Phones shipped during the quarter and the company generated more than $2.3 billion in phone hardware revenue.