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Microsoft just announced its highest net loss ever

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satya nadella
Microsoft CEO Satya Nadella

Microsoft has just posted its biggest quarterly net loss in the company's entire operating history.

The net loss, which is measured over the four quarter period that ended on June 30, totalled $3.2 billion.

The company also reported that sales had dropped 5.1 per cent to $22.2 billion, revealing the latest figures in a performance statement released yesterday.

It’s worth noting that the company’s quarter was seriously hurt by a $7.6 billion write-down related to Nokia assets.

With the write-down excluded, profit actually amounted to $0.62 per share.

Microsoft announced the prospective loss earlier this month, revealing it was writing off the huge figure related to “the acquisition of the Nokia Devices and Services” business, a deal that was completed just last year.

The company also revealed it was making 7,800 employees redundant in an effort to “restructure” its ailing smartphone business.

The news came just weeks after the announcement that former Nokia CEO Stephen Elop was leaving Microsoft as Executive VP of Devices and Services.

Related: The Windows 10 features you need to know

Microsoft is making serious changes to its smartphone business ahead of the launch of Windows 10 for Mobile, which is set for an autumn release.

In a statement, Microsoft CEO Satya Nadella said: “The big shift we’re making about phones is not to think about phones on a standalone basis.”

He added: “We are galvanised around our core as a productivity and platform company for the mobile-first and cloud-first world, and we are driving growth with disciplined decisions, bold innovation, and focused execution.”

Microsoft was recently reported to be planning a release cycle of 6 smartphones per year once the Windows 10 for Mobile platform goes live.

It’s not yet clear what the phones will look like, but a report from earlier today suggested the Microsoft Lumia 950 and 950 XL will be the first smartphones to arrive packing Windows 10 out of the box.

Microsoft is due to launch Windows 10 for desktop starting July 29.

If you want to help pad out Microsoft's coffers a little, check out our Microsoft Surface 3 video review below:

Dead Words

July 22, 2015, 3:46 pm

People keep claiming that the acquisition of Nokia's Device division was a horrid move by Microsoft, but that's not the case at all.
Microsoft (and Nokia before it) made big hardware mistakes with Windows Phones. Nokia released phone after phone and flooded the Windows Phone market, and Microsoft bought Nokia to attempt to stem the flow and rectify Nokia's mistakes. But in order to do that, Microsoft had to take losses. They had to sacrifice in order to attain a brighter future for the company as a whole. It's another step in Nadella's plan to craft a new Microsoft, focused on amazing software and productivity tools supported by beautiful, well-built first party hardware. Microsoft's acquisition of Nokia was a good move, as long as Microsoft plays its cards right. They have a great hand, just no one knows it.
Microsoft had already started slimming down Nokia's chaotic and always crossing hardware and begun redefining the lines between different phones. Starting with Windows 10 Mobile, Microsoft will begin releasing six phones a year, focusing on three markets: Budget, business-oriented, and flagship devices. They'll carry the iconic Lumia branding, with Microsoft's proud name on the rear.
Yeah, Microsoft has taken losses now, but you have to make investments to progress, and in this case Microsoft's investment also meant fixing the mistakes Nokia made.

Ed

July 22, 2015, 4:23 pm

You're talking as though creating the right hardware will be an easy route to suddenly having Windows Phone be a success. It has long been proven that this isn't the case. The phone market is saturated and there just isn't room for Windows Phone without it suddenly bringing something revolutionary to the table to make people switch. Nokia failed cause it went with Windows Phone, not the other way round.

Dead Words

July 22, 2015, 4:43 pm

I never claimed hardware was the path to success. It's just a single step.
Microsoft ISN'T focusing on hardware, in fact as I said they're focusing on software instead.
Microsoft--and Nadella--are focusing on developing clean, efficient, beautiful software that increases productivity and functionality in the consumers' daily lives, while supporting it with a few, well-built, high quality first party devices.
Nokia's mistake wasn't going to Windows Phone, it was spamming out half-decent phone after half-decent phone with no real indication as to the placement and/or purpose of those devices. Microsoft's mistake was not regulating the release of these devices more dramatically, and not pushing Windows Phone harder. Nadella is attempting to rectify both of these mistakes. Nadella understands the importance of mobiles in today's market, and he understands the importance of giving the consumers not only something that they want, but something they need. Something they can use. That is where Windows 10 comes in, and in extension Continuum.
Windows 10 is the focus. Software. Not hardware. Please do not take the words out of my mouth when they were never spoken. Windows 10 is Nadella's hope for the future, and the Surface and Lumia brands will be the front lines.

Ed

July 22, 2015, 5:14 pm

You may care to re-read your own words, and mine too. Your opening post is arguing that microsoft buying nokia was a good thing because nokia was going wrong with hardware.

"Microsoft (and Nokia before it) made big hardware mistakes with
Windows Phones. Nokia released phone after phone and flooded the Windows
Phone market, and Microsoft bought Nokia to attempt to stem the flow
and rectify Nokia's mistakes."

My point is that this was never the case. Hardware was never nokia's problem so your ascertain that microsoft fixing the hardware plan will help Windows Phone gain traction is fundamentally flawed.

I'm not arguing that microsoft buying nokia was wrong for microsoft or nokia but I am saying it was wrong if it was done for the reasons you're suggesting.

John

July 22, 2015, 6:16 pm

Microsoft lost their way years ago, right from the point they concentrated too much on monetizing and protecting a monopoly than innovating. The the only thing thing interesting they've produced in recent years is the Surface Pro 3 (even if it is overpriced).

Dead Words

July 22, 2015, 10:45 pm

Hardware was part of the issue, however. None of Nokia's phones were ever "up-to-date," they were always just a step behind the latest and greatest, yet were sold for the same prices. There were a few successes, like the Nokia Lumia 520, but for the most part Nokia's phones failed. No, it wasn't just hardware issues, but it was part of the problem. There was also a lot of intersections between different models, like the 5xx series and the 6xx series. A lot of it was Microsoft's fault, with marketing, or Windows Phone 7's fatal flaw (the change in kernel from 7 to 8), and I could go on and on, but Nokia was not without fault.
Microsoft fixing these hardware issues, offering great value devices with updated hardware seeks to help Windows Phone. On its own it's not enough to save Windows Phone, but it's a piece of a rather large puzzle that Nadella is trying to solve. I don't agree with everything Satya Nadella has done, and I definitely agree that he's horrid at communication, but I think he's pushing Microsoft in the right direction. He's willing to take a hit now in order to help secure a far brighter future. Again, hardware isn't going to be the one savior of Windows Phone, but it is a piece of it. No matter how many people may deny it, numbers are a big deal to most consumers. The majority of people don't do enough research to realize the difference between a Qualcomm Snapdragon 400 or Snapdragon 805 or an Apple A8 and how they affect performance on different devices. If Microsoft does make all the right decisions, but pushes out some amazing operating system on thirty different phones all with similar names running outdated hardware...then they've once again crippled Windows Phone.
I'm not saying buying Nokia was the best decision Microsoft ever made, but I am saying that it wasn't a bad one, as long as Nadella is doing what I think he was doing. I'm not saying it was right because hardware will--on its own--save Windows Phone, but because it might secure success for the future. And any good business man has to look at the future too.

godafoss

July 23, 2015, 7:14 am

I'm glad the Nokia acquisition has been a disaster for them although not as much as for the thousands of staff they sacked. Nokia are a disgrace agreeing to this shonky deal in the first place, but of course the CEO and his merry bunch of sycophants all made a squillion from the deal.

Tom

July 23, 2015, 8:55 am

I agree, I dont think it was a horrid move. It was a move that has cost MS a lot in the short term but agree it will be good for them in the long term (assuming the rumours of high spec and desirable Windows 10 phones is correct)

In away, I almost see it as Karma for MS after they (through Elop) essentially destroyed Nokia by rejecting all other options of operating systems (even Android) and also moved away from all the excellent hardware benefits Nokia had been developing over the years (Camera modules for example) and moved closer and closer to simply being a budget phone manufacturer which was a real shame. OK, its not a guarantee that Nokia would have survived if they had moved to Android (or stuck with Maemo) but I think they would have been able to struggle on and perhaps restructre/position themselves if they were getting out a high end device. Imagine the Lumia 1020 on android for example... However MS took Nokia mobile manufacture back in and, rumors suggest, look to have turned them in the direction they should have been going in (high end devices) whilst also taking a monetary hit with is only fair since it was them who stuffed up in the first place with Elop

Dead Words

July 23, 2015, 11:42 am

Two high end devices aren't just rumors. Nadella has confirmed and guaranteed that two flagship devices are coming this fall, and their specs are believed to be completely known. And they both have impressive specs. Including USB Type-C and iris scanners (for Windows Hello).
I agree, however, and I don't think anyone can deny that Nadella is a far better CEO than either Elop or Balmer. Neither of the last two CEO's knew what was good for Microsoft, and both of them tried to go in different directions. They didn't unify Microsoft, just stuck bits on and in the end made a lot of mistakes. Yeah they made a few good decisions like the Surface line and Xbox but for the most part...I'm excited to be a part of the new Microsoft. Nadella is rectifying past mistakes that he didn't even make and is taking responsibility for his company.
Microsoft gets bullied alot by the press and by media (like this site) but he's still pushing forward and he's still making a few jokes along the way (go take a look at the unofficial Windows 10 logos Microsoft just released as official wallpapers).

James

July 23, 2015, 8:12 pm

They DESERVE this and to lose much more after all the families they ruined with layoffs.

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