It’s just been two years since Microsoft Corp. MSFT changed the financial reporting structure, and it is changing the segments again!
Starting fiscal 2016 (which began Jul 1, 2015), Microsoft will report results under three segments. The details have been given below —
Productivity and Business Processes will comprise Office, Office 365 services and related products.
Intelligent Cloud will include the entire back-end enterprise software, non-cloud products -Windows Server, and cloud-based services like Azure.
More Personal Computing will consist of Windows, Xbox, online services, mobile devices like phones and the Surface tablet.
Under the Intelligent Cloud segment, Microsoft will put some, but not all, of the commercial cloud products and services. Bing, which is also technically a cloud service, is included in the More Personal Computing segment. However, this might also be due to Cortana, which is powered by Bing and integrated with Windows and Windows Mobile.
The company announced that it will restate the fiscal 2014 and 2015 results under the new operating segments.
Next month, the company will report fiscal first-quarter 2016 results under the new revenue structure.
According to the statement released by Microsoft, the new segments "reflect the company’s strategy and ambitions to build best-in-class platforms and productivity services for a mobile-first, cloud-first world”.
Microsoft currently has a Zacks Rank #3 (Hold).
Other stocks in the same space that investors may consider are Stamps.com Inc. STMP, Travelport Worldwide Limited TVPT and Autobytel Inc. ABTL. While Stamps.com and Travelport sport a Zacks Rank #1 (Strong Buy), Autobytel has a Zacks Rank #2 (Buy).
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