Microsoft profits higher than expected

Microsoft posted a decrease in profits, but they beat analysts forecasts.

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By :  ,  Financial Analyst

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.

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