Microsoft profits soar, Nokia's plunge

Microsoft and Nokia - which recently entered a multi-billion mobile partnership - today announced very different results.

The US company seems to be coping well with rapidly changing technologies trends; the Finnish company not so much.

Microsoft  announced record fourth-quarter revenue of $US17.37 billion, but Nokia reported an operating loss of $US700 million.

Microsoft’s fourth quarter revenue increased 8% from the same period last year, with an annual revenue of $US69.96 billion, a 12% increase from 2010.  Net income was $5.87 billion, up 30% from last year.

The ongoing momentum of Kinect, Xbox Live and the Xbox 360, the top-selling game console in the United States over the past 12 months, Microsoft said.  The Entertainment and Devices division revenuw grew 30% for the fourt quarter, and 45% for the full year, following Microsoft’s announcement at E3 of upcoming game lineup and Xbox Live content partnerships.

Microsoft Office sales continued strong with Office 2010 the fastest-selling version of Microsoft Office in history at more than 100 million licenses sold, the company said.

However Windows and Windows Live division revenue declined 1% for the fourth quarter and 2% for the full year, the company said.

“Excluding the impact of the prior year Windows 7 launch and revenue deferral, we estimate full-year revenue growth was in line with PC market growth of 2% to 4%”

The company said Windows 7 had sold more than 400 million licenses and “business deployments” continued to accelerate, with the preview of Windows 8 in the fourth quarter featuring a new user interface.

Microsoft chief operating officer Kevin Turner said the company continued to move to the cloud, with Office 365 and growth in Windows Azure.  He said the year had been strong with the double-digit increases in revenue and earnings.

Nokia not so good
Meanwhile Nokia reported an operating loss of $US700 million in the fourth quarter, with a drop in sales of 11% from last quarter to 9,725 million.  Last year’s fourth quarter saw sales of 10,003 million.

Smart device net sales were down 32% to 2.368 billion, with 16.7 million units sold, compared with Apple’s recent announcement that it had sold 20 million iPhones. 

Nokia chief executive Stephen Elop said the results were “clearly disappointing” but said the company was working on longer term competitiveness and looking to end the year with more net cash and liquid assets than at the end of this second quarter.

Mr Elop said Nokia was planning to have “a sequence of product launches in specific countries” of its Windows Phone devices.

“We firmly believe that our deliberate and unwavering commitment to making the changes necessary at Nokia is the right way to deal with the disruptive forces in our industry and drive value creation for our shareholders.”

The first Nokia phones running on Microsoft's Windows 7 software are due before the end of the year.

The Finnish company plans to move most or all or its high-end models to Microsoft's platform.