Business, Hardware, Software Programs

Microsoft Earns $5 Billion in 4Q13, Surface RT a Complete Failure

Microsoft Corp. (NASDAQ:MSFT) released their Q4 2013 financial results (along with full fiscal year 2014 report), and while there are no major abnormalities when it comes to revenue and net income, it is worth noting that Surface RT failure did cost the company almost a billion USD.

The company announced $19.9 billion in revenue with $4.97 billion in net income. These numbers are, by themselves very good, but it is worth noting that Microsoft lost $900 million ?related to Surface RT inventory adjustments,? so results could?ve been even better (as the loss is included in the overall results) ? a fact that didn?t exactly please investors. In recent weeks, Surface RT got major discounts (up to $150), which signals just how much hope Microsoft had for the device – and just how much it overproduced. Windows RT based devices continue to be hard-to-sell, even though some companies (namely, Nvidia) recently said that they still see a bright future for the platform. Company certainly has enough resources to continue the push for their RT system, but if it doesn?t root in the market soon enough, there shouldn?t be any doubts that they will cut the cord.

Though Microsoft didn?t give out new figures for sold Windows 8 licenses, Windows Division grew 6% from last year, posting a revenue of $4.4 billion. Microsoft’s Business Division revenue grew 14% ($7.2 billion), Entertainment and Devices Division grew 8%, Server and Tools grew 9% ($5.5 billion), etc. Despite the recorded PC market stagnation and downfall depending on the area, many keep on forgetting that Microsoft is well branched and not relying on one single source of revenue. Clearly, PC market had an impact on the company, but strong demand for enterprise products, as well as online services (SkyDrive, Office 365, Windows Azure and Dynamics CRM) helped a lot.  

?We are working hard to deliver compelling new devices and high value experiences from Microsoft and our partners in the coming months, including new Windows 8.1 tablets and PCs,? said Steve Ballmer, chief executive officer at Microsoft. ?Our new products and the strategic realignment we announced last week position us well for long-term success, as we focus our energy and resources on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value the most.?

The company says that their FY 2014 (started with this July) will be their biggest innovation year ever, and outlook is mostly positive. At the very end, fiscal 2013 was a very successful year, despite $900 million loss with Surface RT, crumbling PC market and European Commission fine ($733 million). In total, Microsoft managed to record $77.85 billion in revenue and operating income of $26.74 billion. Entire report is available on the link.