Soft PC sales send Microsoft profit down 29 pct

Jul 23, 2009 By JESSICA MINTZ , AP Technology Writer
Microsoft logo A

(AP) -- Microsoft Corp. said Thursday its profit in the last quarter plunged 29 percent because of weak computer sales, ending a fiscal year in which the software maker's revenue fell for the first time since the company went public in 1986.

Microsoft's revenue in the quarter was well short of analysts' expectations, and its shares plummeted $2, or 7.8 percent, to $23.56 in after-hours trading. Before the earnings report the stock had closed regular trading up 3.1 percent at $25.56.

Microsoft's earnings sank to $3.05 billion, or 34 cents per share, from $4.3 billion, or 46 cents per share, in the same period last year.

Because some people buying Windows Vista computers now will get free upgrades to the next operating system, Windows 7, in October, Microsoft deferred $276 million of Windows revenue. That cut its profit by 2 cents per share.

The earnings were also hurt by legal charges, severance charges and the declining value of its investments. Excluding all those items, Microsoft would have beaten Wall Street's expectations by 2 cents per share, according to a Thomson Reuters poll.

Microsoft's quarterly sales dropped 17 percent to $13.1 billion. Even if the company had not deferred part of its Windows revenue, it still would have missed the Street view by a wide berth. Analysts were looking for $14.4 billion in sales.

The divisions responsible for Windows, Office, Xbox 360 and Web advertising all posted sales declines. So did Microsoft's server software group, which had been holding up better than other groups in the last few quarters despite the economic crisis.

For the full fiscal year, which ended June 30, the company's profit fell 17 percent to $14.6 billion, or $1.62 per share, from $17.7 billion, or $1.87 per share, in the previous year. Sales sank 3 percent to $58.4 billion.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: HP sales inch up while profit drops

add to favorites email to friend print save as pdf

Related Stories

Microsoft feels more recession fallout, sales drop

Apr 23, 2009

(AP) -- Microsoft Corp. said Thursday its quarterly revenue fell from the previous year for the first time in its 23-year history as a public company, and its profit fell more sharply than Wall Street was ...

Texas Instruments 2Q profit falls 56 percent

Jul 20, 2009

(AP) -- Chip maker Texas Instruments says its second-quarter earnings fell 56 percent from a year ago, clipped by a weak economy that the company expects will "take some time" to strengthen.

EA posts smaller 4Q loss as costs decline

May 05, 2009

(AP) -- Video game publisher Electronic Arts Inc. posted a smaller net loss Tuesday for its fiscal fourth quarter as it further slashed costs in a quarter that had fewer hit game launches.

EBay 1st-qtr profit, sales fall on weak economy

Apr 22, 2009

(AP) -- EBay Inc. said Wednesday the weak economy contributed to declines in both earnings and revenue for the second consecutive quarter, but the online marketplace operator beat analysts' expectations.

Recommended for you

HP revenue inches up after years of decline

9 hours ago

Hewlett-Packard on Wednesday reported that its quarterly revenue rose for the first time in three years, nudged by improved computer sales everywhere except Russia and China.

Restaurants experimenting with pay-in-advance tickets

12 hours ago

With restaurant patrons increasingly jumping on the Internet to make reservations, some high-end eateries here and across the country are adding a new tech wrinkle: having their clientele pay for their meal in advance using ...

Chip maker Infineon to buy California firm for $3B (Update)

15 hours ago

German chip maker Infineon Technologies AG says it has agreed to pay $3 billion in cash for California-based semiconductor firm International Rectifier, which produces power-management components used in everything from cars ...

User comments : 2

Adjust slider to filter visible comments by rank

Display comments: newest first

docknowledge
5 / 5 (1) Jul 23, 2009
Good.

Eventually crappy software and high-pressure business techniques fail, and normal values prevail.

kevinf
not rated yet Jul 23, 2009
Um. Maybe they are pricing themselves out of the market?