Microsoft's Profits Decline on Sluggish PC Sales but Surface Revenue Grows

By Peter R - 27 Jan '15 10:33AM

Declined sales of its Windows operating system and a strong U.S dollar have forced Microsoft to report smaller profits last quarter.

According to Reuters, Microsoft's Windows sales have seen a crunch owing to global decline in PC sales.

"Windows OEM Pro revenue declined 13%; revenue was impacted by the business PC market and Pro mix returning to pre-Windows XP end of support levels and by new lower-priced licenses for devices sold to academic customers. Windows OEM non-Pro revenue declined 13%, with license growth from opening price point devices," Microsoft reported in a news release.

Engadget reported that Microsoft's Surface Tablet and its gaming devices posted healthy sales. The year on year revenue from tablet sales increased 24 percent.

"Surface revenue of $1.1 billion, up 24%, driven by Surface Pro 3 and accessories. Xbox console sales totaled 6.6 million units, with strong holiday season performance," the Redmond giant noted on Monday. Surface Tablets were seen as Microsoft's cash drain in the last few years as the company used to write them off before the turnaround.

Microsoft also noted a $ 243 million operating loss includes the cost of Nokia's business integration.

"Microsoft is continuing to transform, executing against our strategic priorities and extending our cloud leadership. We are taking bold steps forward across our business, and specifically with Windows 10, to deliver new experiences, new categories, and new opportunities to our customers," said Satya Nadella, Microsoft chief executive officer.

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