Microsoft Q1 sales pays price for Win 7 launch
Though not as much as expected
Microsoft's first quarter was not as bad as expected, but still pretty bad compared to a year ago.
The company saw revenue for the period fall to $12.92bn compared to $15.06bn in the first three months of 2008.
For the first financial quarter ended September 30, Microsoft made operating income of $4.48bn, versus $5.99bn in 2008.
Microsoft said the figures reflect the deferral of $1.47bn in revenue relating to Windows 7 upgrades and sales of the software to OEMs before general release.
If that deferred revenue was added back, total revenues would have been $14.39, down 4 per cent on the year.
Nevertheless, the results beat analysts' expectations and MS shares are expected to rise in early trading.
Revenues by segment reveal that server and tools revenue was almost flat, Windows and Windows Live fell from $4.28bn last year to $2.62bn this year and online services revenue fell to $490m from $520m. The online services division made a loss of $480m and "Corporate-level activity" led to a loss of $959m.
The entertainment and devices division, X-box et al, was the only business to increase profits to $312m for the quarter, up from $159m last year.
There's more here.
The company also said it is cutting expected costs for the year ahead by $300m to $26.2bn for year ending 30 June 2010. ®
re: Wait for it.....
they won't fall all at once but when it does happen, they will have to pull the plug on supporting so many of their money losing ventures that it'll seem like they are shutting down. The vast majority of their profits come from the Windows OS(desktop/server) and Microsoft Office and they continue to lose a billion or so annually on Windows Mobile, MSN, online stuff, Xbox, etc. So as they move further down the curve, they'll have to start cutting more than just a few jobs and things like MS Money.
And it does not help one bit that the iPhone and now Android is showing people that they don't need Windows to have a useful computing experience. They'll either have to start moving software to other platforms and try to compete or keep riding the market down to where they are just another player.
Angelic Steve because they opened peoples eyes to the fact that there can be a happy life outside of Windows.
Nah, they deferred revenue not cost. Sold a whole bunch of Win7 early to the OEMs to make for a nice release day and the profit will show up next quarter.
Either way, shucks. Big numbers.
Playing with the big boys
This is why companies like doing business with companies like MS and IBM and not switch to Linux or other technically superior but niche offerings.
Companies like MS can weather these storms without the risk of going bust or failing to provide support and honour contracts.
If Apache didn't have companies like IBM and Sun lurking in the shadows to keep them in beer money, or Firefox had Google to pay all their bills, or Ubuntu had John Shuttleworth sprinkling the readies on it like a bag of tea leaves, they'd have got nowhere because no one important would ever take notice of them. The complete failure of sans-Google Mozilla suite is proof of that.