Feeds

Microsoft sales tumble from quarterly high

Prepping for recession

Build a business case: developing custom apps

Microsoft's put a brave face on its first-quarter results one year after trumpeting its best performance in eight years.

The company Thursday fell back to highlighting its un-sexy multi-year licensing agreements with big customers as proof its business is sound and can endure a recession and netbooks onslaught, as it saw software sales tumble.

For the three months of fiscal 2009, Microsoft reported net income of $4.37bn on sales of $15.06bn, an increase of nine percent and two per cent respectively.

That compares to the first quarter of fiscal 2008 where net income and sales jumped 23 per cent and 27 per cent to $4.2bn and $13.76bn respectively - the fastest first quarter since 1999. Kevin Johnson, president of the platform and services division at the time, cited robust demand for premium editions of Windows Vista.

For further context on where Microsoft is right now, compare this quarter's results with the quarter reported in July. Revenue fell nearly five percent and net-income was flat compared to the July quarter.

The company's Windows client business grew by half its anticipated target - two percent instead of four compared to last year. Microsoft said fewer traditional PCs and more netbooks had shipped than expected. Also, revenue from OEMs was down as they shifted to sell cheaper netbooks.

Netbooks running Windows mean growth but relatively low income as they do not run money spinning versions of Windows, like Windows Vista Premium Edition. Microsoft said it was too early to say how much netbooks are cannibalizing traditional sales.

The good news for the current quarter? Microsoft at least hit the diluted earnings per share guidance - $0.48, which compared to last year's EPS of $0.45. Microsoft also exceed its own expectations on revenue for this quarter, having forecast between $14.7bn and $14.9bn.

With the economic climate in mind Microsoft revised its full-year guidance. Microsoft now expects earnings per share between $2.00 to $2.10 on revenue between $64.9bn and $66.4bn compared to the previously stated $2.12 and $2.18 per share, and revenue of between $67.3bn and $68.1bn.

Chief financial officer Chris Liddell said Microsoft was assuming anywhere between a "mild recession" and a "deeper recession" that would impact IT spending. ®

The essential guide to IT transformation

More from The Register

next story
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?