Microsoft profits higher than expected

<p>Microsoft posted a decrease in profits, but they beat analysts forecasts.</p>

Microsoft has reported a fall in profits, with $4.5 billion (£2.8 billion) posted in the three months to September, which is 13 per cent lower than the same time last year.

Microsoft boss Satya Nadella said today (October 24th) the decrease is a result of costs related to job cuts and its purchase of Nokia's smartphone business earlier this year and that Microsoft is being "positioned for future growth".

"Integrations and restructuring expenses" cost $1.1 billion, he noted.

The Nokia business also boosted revenues. They climbed 25 per cent to $23.2 billion, beating expectations and sending shares higher in after-hours trading, the BBC reports.

The company is putting a strong emphasis on mobile phones, and has recently unveiled its newest software Windows 10 that will be running on devices ranging from phones to tablets. The OS is expected to be available for purchase in 2015.

It also agreed to pay $2.5 billion (£1.5 billion) to acquire Swedish games developer Mojang and its popular Minecraft video game franchise, saying in a statement that "gaming is a top activity spanning devices, from PCs and consoles to tablets and mobile, with billions of hours spent each year."

Some analysts have speculated the deal is designed to attract more users to Microsoft's Windows Phone devices, as Minecraft is one of the top-selling apps on both Apple's iOS store and and Android's Google Play.

The firm has announced last summer it is to cut up to 18,000 jobs over the next year, marking the deepest cuts in the technology its history. In an open letter to staff, the firm said the bulk of the cuts (around 12,500) will be in its phone unit Nokia.

Satya Nadella wants the firm to shift its focus away from software to online services, apps and devices. The cuts are aimed at helping Microsoft better compete with rivals including Google and Apple.

Find up to date information on the FTSE 100 and spread betting strategies at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.