Microsoft Gets Stung by Global PC Slump

Microsoft Corp. posted a 32% drop in profit and the first decline in quarterly revenue in its 23-year history as a public company, as the global recession took a toll on nearly every segment of the software company’s business.Four of Microsoft’s five business divisions recorded lower sales, including a 16% decline in its flagship Windows business to $3.4 billion. Microsoft executives blamed the drop on a general pullback in spending on PCs by both consumers and businesses. PC shipments fell by 6.5% in the first three months of the year, according to Gartner Inc.
http://online.wsj.com/article/SB124051825214249437.htmlMicrosoft Quarterly Revenue Falls for First Time in 23 Years
For the first time in Microsoft’s 23-year history as a public company, its sales dropped year-over-year.Microsoft, the world’s largest software company, said Thursday that its revenue fell 6 percent, to $13.7 billion from $14.5 billion, in the quarter that ended March 31. And it reported net income of $3.0 billion, or 33 cents a share — a 32 percent drop in profits from the $4.4 billion, or 47 cents a share, reported in the same period last year.
http://nytimes.com/2009/04/24/technology/companies/24microsoft.htmlMicrosoft reveals first revenue drop since going public in 1986
The world’s biggest software company, Microsoft, has suffered its first drop in revenue since it went public in 1986 as the global economic downturn savages its once indestructible sales of computer operating systems.Microsoft tonight revealed revenue of $13.65bn for the three months to March, a drop of 6% on the same period last year, as business customers trimmed their spending on technology packages such as Windows and Microsoft Office.
http://www.guardian.co.uk/business/2009/apr/23/microsoft-revenue-plungesMicrosoft revenues down for the first time; profits plunge 32%
In its latest quarterly results, Microsoft has posted the first year-on-year fall in revenue in its 23-year history, with a 5.6% fall to $13.65bn. Net income dropped by 32% to $3.0bn after Microsoft took $710mn in write-offs.
http://www.guardian.co.uk/technology/blog/2009/apr/23/microsoft-revenues-downMicrosoft’s Downbeat Outlook
There was little optimism in remarks by Microsoft executives when they reported fiscal third-quarter results on Apr. 23. Chipmaker Intel had said the PC business had bottomed when it announced earnings on Apr. 14. A few days later, IBM gave investors glimmers of hope that the economy may be turning around. And whole divisions of Apple seemed to shrug off the recession entirely when the company’s results soundly beat analysts’ estimates on Apr. 22.Microsoft, the world’s largest software maker, is seeing no such rays of sunshine. In an Apr. 24 call with Wall Street analysts, Microsoft Chief Financial Officer Chris Liddell sounded downright morose. “We remain more cautious than most,” he said. “While we’d all like to hope that the recovery will be short and painless, we unfortunately think it will be slow and difficult.”
http://www.businessweek.com/technology/content/apr2009/tc20090423_669380.htmMicrosoft Reports Third-Quarter Results
Lower operating expenses narrow revenue gap in difficult economic environment.Microsoft Corp. today announced revenue of $13.65 billion for the third quarter ended March 31, 2009, a 6% decline from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $4.44 billion, $2.98 billion and $0.33 per share, which represented an increase of 3% and declines of 32% and 30%, respectively, when compared with the prior year period.The financial results for the third quarter ended March 31, 2009, included $290 million of severance charges related to the previously announced plan to reduce up to 5,000 positions and $420 million of impairments to investments. Combined, these two charges reduced earnings per share by $0.06.Revenue in Client, Microsoft Business Division, and Server & Tools was negatively impacted by weakness in the global PC and Server markets. Revenue from enterprise customers remained stable during the quarter.”With our continued R&D investment and our broad suite of products and services, we remain in a great position to compete and gain share in the marketplace,” said Kevin Turner, chief operating officer at Microsoft. During the quarter, Microsoft released the beta version of the Windows 7 operating system, which remains on track for a fiscal year 2010 launch. Development milestones were achieved on other products including Microsoft Office 2010, Windows Server 2008 R2 and Windows Mobile.”While market conditions remained weak during the quarter, I was pleased with the organization’s ability to offset revenue pressures with the swift implementation of cost-savings initiatives,” said Chris Liddell, chief financial officer at Microsoft. “We expect the weakness to continue through at least the next quarter.”Business OutlookMicrosoft offers updated operating expense guidance of $26.7 billion to $26.9 billion, including severance charges, for the full year ending June 30, 2009.Management will discuss third quarter results and the company’s business outlook on a conference call and webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today.Webcast DetailsChris Liddell, senior vice president and chief financial officer, Frank Brod, corporate vice president and chief accounting officer, and Bill Koefoed, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/msft. The webcast will be available for replay through the close of business on April 23, 2010.About MicrosoftFounded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.Forward-Looking StatementsStatements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

• challenges to Microsoft’s business model;
• intense competition in all of Microsoft’s markets;
• Microsoft’s continued ability to protect its intellectual property rights;
• claims that Microsoft has infringed the intellectual property rights of others;
• the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;
• actual or perceived security vulnerabilities in Microsoft products that could reduce revenue or lead to liability;
• government litigation and regulation affecting how Microsoft designs and markets its products;
• Microsoft’s ability to attract and retain talented employees;
• delays in product development and related product release schedules;
• significant business investments that may not gain customer acceptance and produce offsetting increases in revenue;
• unfavorable changes in general economic conditions, disruption of our partner networks or sales channels, or the availability of credit that affect the value of our investment portfolio or demand for Microsoft’s products and services;
• adverse results in legal disputes;
• unanticipated tax liabilities;
• quality or supply problems in Microsoft’s consumer hardware or other vertically integrated hardware and software products;
• impairment of goodwill or amortizable intangible assets causing a charge to earnings;
• exposure to increased economic and regulatory uncertainties from operating a global business;
• geopolitical conditions, natural disaster, cyberattack or other catastrophic events disrupting Microsoft’s business;
• acquisitions and joint ventures that adversely affect the business;
• improper disclosure of personal data could result in liability and harm to Microsoft’s reputation; and
• outages and disruptions of online services if Microsoft fails to maintain an adequate operations infrastructure.

For further information regarding risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations Web site at http://www.microsoft.com/msft.All information in this release is as of April 23, 2009. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.This Microsoft news release was sourced from:
www.microsoft.com/presspass/press/2009/apr09/04-23fy09Q3earnings.mspx