Feeds

Microsoft doubles quarterly revenue drop

Windows 7 grand plan for growth

Business security measures using SSL

Microsoft has recorded its second year-on-year decline in quarterly revenue, more than double the size of the first crash it reported this spring.

Revenue for the whole company fell by 17 per cent to $13bn for the three months ending June 30, compared to a six per cent drop of $13.65bn reported in April. Income for the fourth-quarter was down 29 per cent to $3bn, and earnings per share were down 12 cents to $0.34.

The overall revenue loss ensured Microsoft missed Wall Street's anticipated target by around a billion dollars. Investors had hoped for $14.37bn.

Of Microsoft's five business units, it was the core Windows client that was the biggest drag on performance. Revenue fell 28 per cent to $3.1bn, with income down 33.3 per cent to $2.1bn.

Revenue was also down in the server and tools, Office, online, and entertainment and devices divisions by between 5.6 and 25 per cent. Online - home to Bing.com - was down 12.6 per cent.

Chief financial officer Chris Liddell said OEM unit sales were down 10 per cent compared to this time last year, when OEMs had overstocked and sales reached "historic levels." Also, he said, retail sales are down 16 per cent. He blamed this on people holding off on Windows Vista in anticipation of Windows 7.

That left Liddell looking for rabbits' feet to rub. He predicted Windows client revenue could outpace PC sales by the end of this year - the Microsoft's fiscal second quarter and the calendar fourth quarter that covers the busy Thanksgiving and Christmas consumer-shopping season.

Liddell bet on a perfect storm of the power of Window 7, due to ship on October 23, and an improving economy that will see consumers open their wallets and businesses upgrade their PCs after postponing purchases due to reduced IT budgets.

That's quite a set of circumstances to bet on when the PC industry isn't growing. Even Liddell says that while things won't get worse for the rest of this year, they won't necessarily improve.

Microsoft has laid the groundwork to boast a blow-away second fiscal quarter, with the Windows 7 Technology Guarantee Program and other discounts. Revenue from these programs can't be realized until Windows 7 actually ships, and while Windows 7 will come in at the tail end of the first fiscal quarter, it should be the second that gets the biggest boost.

Liddell predicted between $1.1bn and $1.3bn in pre-sales of Windows 7 from the Windows 7 Technology Guarantee Program in the first quarter. That compares to $276 million from the program recorded in the quarter just closed, which must also be rolled over.

Liddell said that Microsoft was unable to claim 22 per cent of the revenue it made on Windows this quarter because of the Windows 7 Technology Guarantee Program deferrals.

For the full fiscal year 2009, Microsoft's revenue was slightly down 3.2 per cent to $58.4bn with income down 17 per cent to $14.5bn. Earnings per share took a $0.25 hit, coming in at $1.62. Revenue was down in all business units except server and tools (home to Visual Studio, SQL Server, and Exchange), and it grew 7.8 per cent over the previous year. The Windows client division was down 12 per cent, and the business division dropped 0.18 per cent. ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.