Devices And Consumer Licensing Business Continues To Drag Down Microsoft’s Financial Results

Microsoft Q3 D&C

Microsoft today announced that revenues for the quarter ended March 31, 2015 grew to $21.7 billion. Gross margin, operating income, and diluted earnings per share for the quarter were $14.6 billion, $6.6 billion, and $0.61 per share, respectively. While the revenue was above wall street’s estimates, there was one particular division which dragged the revenue by over 1 billion. D&C Licensing revenue was at $3.47 billion, down from $4.59 last year.

Windows OEM Pro revenue declined 19%, as Pro mix returned to pre-Windows XP end-of-support levels and the business PC market declined. Also, Windows OEM non-Pro revenue declined 26%, primarily due to channel inventory drawdown and ongoing mix shift to opening price point devices. Due to less sales of Windows PCs, Office consumer revenue was also down 41%. Windows Phone revenue also declined 16% due to less licensing revenue due to higher mix of low royalty devices.

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