Microsoft has reported quarterly sales of $19.9 billion (£13 billion) for the period ending 30 June, while also elaborating on a major new reorganisation underway at the company, which is intended to boost collaboration and communication among Microsoft's various teams and products.
The software giant's revenue for its fiscal fourth quarter was up 10 per cent year over year, a result that seemed to buck the sluggish sales trend affecting the global PC industry. Operating income was a robust $6.1 billion (£4 billion), considerably better than the $192 million (£126 million) reported in the same period in 2012, though the year-ago quarter saw a whopping $6.2 billion (£4.1 billion) impairment charge drag down its numbers.
"We are working hard to deliver compelling new devices and high value experiences from Microsoft and our partners in the coming months, including new Windows 8.1 tablets and PCs. Our new products and the strategic realignment we announced last week position us well for long-term success, as we focus our energy and resources on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work, and on the go, for the activities they value the most," Microsoft CEO Steve Ballmer said in a statement.
During a call with investors and analysts, CFO Amy Hood elaborated upon the reason for the coming changes at Microsoft. "I want to be clear — we know we need to do better, which is why we instituted the reorganization we did last week," she said.
Dubbed "One Microsoft," the major restructuring effort involves an executive shakeup and the consolidation of several principal business units and product lines along simpler lines. Going forward, the company will be organised by function: engineering (which includes OS, apps, clouds, and devices); marketing; business development and evangelising; advanced strategy and research; finance; HR; legal; and COO.
The restructuring will also see the departure of some veteran executives at Microsoft, including Kurt DelBene, who will retire as president of Microsoft's Office division, having been at the firm since 1992.
"Improving our performance has three big dimensions: focusing the whole company on a single strategy, improving our capability in all disciplines and engineering/technology areas, and working together with more collaboration and agility around our common goals. We are rallying behind a single strategy as one company — not a collection of divisional strategies," Ballmer said when announcing the reorganisation on 11 July.
"Each discipline will help drive our overall strategy. Each discipline will also be charged with improving our core capabilities in its area. We must improve in all aspects of the business," Ballmer wrote in a memo to staff.
Patrick Moorhead, principal analyst for Moor Insights & Strategy, said the restructuring and shakeup made sense as Microsoft seeks to address new market dynamics but figured that the company had a lot of catching up to do given its competitive challenges.
"Microsoft's reorg makes sense as it reflects their new strategy of devices and services. Devices and services are where the market growth is, so it at least reflects the market realities," he said.
"The challenge is that Microsoft is an OS and software company now, so they have a good start, but they have a long way to go to compete with Apple on devices and Google on services."
In addition to the arrival of Windows 8.1 and new hardware products running Microsoft's latest update to its flagship operating system, the company is looking forward to the release of its next-generation game console, the Xbox One, later this year, Hood said.
Microsoft's CFO also said that the recent price cut for Surface RT tablets would increase the viability of the struggling device in the market.
"Microsoft's price cut of the Surface tablet is a pretty clear indication they are trying to increase their share of the tablet market," said SRV Network analyst Karl Volkman. "They are in direct competition with the iPad, and they need to gain some competitive advantage to keep up with Apple. Cutting the price was their best option and makes the Surface tablet more accessible to consumers trying to decide between the two products."
Microsoft also divulged its full-year, fiscal 2012 financial results. Revenue for the 12 months ending 30 June was $77.8 billion (£50.9 billion), up six per cent year-over-year, operating income of $26.8 billion (£17.6 billion) was up 23 per cent, and earnings per share of $2.58 (£1.69) represented a 29 per cent increase on EPS from the company's fiscal 2011.