Apr
24
Microsoft Revenue Falls for the First Time – Stock Rises
Last night, Microsoft (NASDAQ: MSFT) reported its earnings for the previous quarter. For the first time in its 23-year history, the world’s largest software company reported a drop in revenue over the same quarter the previous year. That in itself is an amazing statistic, and it goes to show just how deep the recession has affected spending in the United States. Even events like 9/11 and the bursting of the dot-com bubble didn’t keep Microsoft from making record amounts of money, year after year.
Microsoft revenue drops for the first time ever. Credit: Robert Scoble/Flickr
Revenue for the quarter ending March 2009 sank 32% over the same quarter in 2008. Revenue was down 6% over the previous quarter, however Microsoft managed to cut costs by a larger 9% during the same period, which pleased Wall Street.
Microsoft also reported a total profit of $2.98 billion last quarter, which is much less than the $4.39 billion they earned for the same quarter last year. However, these are still huge profit numbers and it keeps Microsoft in position as one of the richest and most profitable companies in the world.
Shares of MSFT are up over 7% on this news, mostly because they met Wall Street’s earnings expectations. Traders are also optimistic about the new Windows 7 roll-out which Microsoft reported is still on schedule for release in early 2010 (many people feel it may be sooner than that). Certain departments, such as the Xbox 360, are even experiencing growth at the moment.
Microsoft CEO Steve Ballmer said, “”We are planning essentially for the economy to contract. That may take two, three, four years, partly depending on government policy to ease some of the pain. Then we will see growth again.”
Mr. Ballmer also mentioned that even though he is not interested in buying Yahoo, they still see the potential in a Yahoo partnership in the future. He is just waiting for the right time.
For further information, check out the following links:
Microsoft cuts costs, says Windows 7 on track
Microsoft’s sales show fallout of recession
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