Microsoft Revenue Rises, Profit Falls As Nokia Absorbed

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Microsoft
A shadow of a man using his mobile phone is cast near Microsoft logo at the 2014 Computex exhibition in Taipei, June 4, 2014.

(Reuters) - Microsoft Corp said on Tuesday its fiscal fourth-quarter revenue rose, beating Wall Street expectations, but its profit fell 7 percent, partly due to the effect of incorporating the handset business of Nokia.

Shares of the world's largest software company, which hit 14-year highs this week, were flat in after-hours trading.

Microsoft reported quarterly profit of $4.61 billion, or 55 cents per share, compared with $4.96 billion, or 59 cents per share, in the year-ago quarter.

Wall Street had expected 60 cents per share, on average, although it is not clear how analysts had factored in the performance and cost of integrating the Nokia operation, which became part of Microsoft in late April.

Revenue rose 17 percent to $23.38 billion, above analysts' average estimate of $23 billion, chiefly because of additional sales from Nokia.

"These results are good enough for the Street and this is another step in the right direction," said Daniel Ives, an analyst at FBR Capital Markets. "Nokia was a bit worse than the Street was expecting but that is not totally surprising given the massive growth challenges that business faces in the field."

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