Shares plummet as Microsoft reports £2 billion quarterly loss

Microsoft reported a huge loss, the biggest in its 40 year history, but don't worry – the company is far from being in trouble.

The company reported a quarterly loss of $3.2 billion (£2.05 billion) after it wrote down its Nokia business. Microsoft bought Nokia last year in a bid to be a better competitor in the unforgiving smartphone market.

It also said this month that it would cut 7,800 jobs, or nearly seven per cent of its workforce, mainly in the phone hardware business.

Microsoft's shares fell 4 per cent to $45.38 (£29.05) in extended trading on Tuesday, Reuters reported.

The company shifted its focus to cloud computing and software, and is now getting ready to release the Windows 10 operating system. The OS, a successor to the fairly unsuccessful Windows 8, is expected to boost sales of Windows to computer manufacturers.

Those sales fell 22 per cent in the quarter. Sales of Windows to businesses fell 21 percent from the year-earlier quarter, when demand for the operating system had surged after Microsoft discontinued support for Windows XP.

Microsoft wants to generate revenue by building search and gaming into the Windows 10 interface, Chief Financial Officer Amy Hood said in April. According to Hood, Microsoft’s search engine Bing will be profitable in the year ending June 2016.

Revenue from Microsoft's commercial cloud business, which includes offerings such as Office 365 and Azure, rose 96 percent, excluding the impact of a strong dollar. Excluding items, the company earned 62 cents per share.