Microsoft announces Q2 2014 earnings

On July 22 Microsoft announced its financial results for the second quarter of 2014.

Total revenue for the quarter ended June 30 was $23.38 billion. Looking at the financials details we can see that gross margin was $15.79 billion,  operating income was $6.48 billion and diluted earnings per share were $0.55 each.

Revenue of the recent acquisition of the Nokia Devices and Services completed on April 25, 2014 are disclosed to be revenue, gross margin, operating income, and diluted EPS of $1.99 billion, $54 million, $(692) million, and $(0.08), respectively.

Despite the financial growth of the big giant, Microsoft announced its decision to cut 18,000 jobs, which includes 12,500 Nokia factory and professional positions — which is about half  of the employees added in the acquisition. The resting 5,500 positions are cut at Microsoft, mainly in sales, marketing and engineering. Microsoft’s strategy is to join two business units, Smart Devices and Mobile Phones. According to Microsoft’s statement the reductions will be completed by June 30, 2015 and it will result in a pretax charge of $1.1 billion to $1.6 billion.

Satya Nadella, chief executive officer of Microsoft, who took over after Bill Gates and Steve Ballmer, wrote an email to all of Microsoft employees explaining his strategy.

Nadella commented about Q2 2014 results:

We are galvanized 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,“I’m proud that our aggressive move to the cloud is paying off – our commercial cloud revenue doubled again this year to a $4.4 billion annual run rate.