Microsoft Corp. missed analyst estimates for profit in the company’s first earnings release since picking up Nokia’s mobile business in mid-April.
The maker of Windows, Office, Xbox and a number of mobile devices said its fourth-quarter earnings per share were $0.55, behind estimates of $0.60, with the Nokia acquisition costing about $0.08 a share.
Revenue for the quarter reached $23.4 billion, up 18 percent from the fourth quarter of last year, with a $2 billion boost provided by Nokia. Microsoft sold 5.8 million Nokia Lumia smartphones and 30.3 million other Nokia phones.
Daniel Ives, an analyst at FBR Capital Markets, called “the solid results” a relief for investors amid a “choppy environment.”
“As integration goes on between Nokia and Microsoft, there’s going to be those unexpected speed bumps, but the street is looking through that,” Ives said. “You see a lot more optimism around shares.”
Part of the reason for optimism continues to be new chief executive Satya Nadella, who Ives said showed last week that he is willing to make tough decisions to cement his vision for Microsoft. Nadella plans to cut up to 18,000 positions, about 14 percent of Microsoft’s workforce and the largest reduction in company history. Many of the cuts are a result of adding Nokia’s mobile business, which brought with it 20,000 employees.
“You finally have a general leading the troops in the right direction,” Ives said. “Microsoft looks strong heading into 2015.”
Microsoft also attributed growth to more people buying a new version of Office and subscribing to its online service. The company’s cloud business, for hosting information online for other businesses, grew 147 percent in revenue from a year earlier, reaching $564 million.
The Bing search engine saw advertising revenue rise 40 percent, on higher ad rates and search volume.
Microsoft closed its fiscal year with $87 billion in revenue, up from $78 billion in 2013.
Shares of the Redmond, Wash., company closed at 44.83 Tuesday, up about 5 percent from a week earlier, when rumors of layoffs began to emerge. In after-hours trading, shares rose 62 cents to $45.45.