Microsoft sales fall 6 percent from a year ago
As analysts predicted it might, Microsoft on Thursday reported the company's first ever year-over-year sales decline for the quarter ended March 31.
The software maker said fiscal third-quarter sales totaled $13.65 billion, down 6 percent compared with $14.45 billion in the same quarter a year ago. Its per-share earnings were 33 cents per share, although that included severance and investment impairment charges that reduced earnings by 6 cents per share.
Analysts had been projecting sales of $14.15 billion and per-share earnings of 39 cents, down from 47 cents a year ago, according to Reuters Estimates.
Microsoft had said in January that the crystal ball for the company was cloudy and at the time announced its first companywide layoffs, with plans to chop 5,000 jobs over an 18-month period.
"While market conditions remained weak during the quarter, I was pleased with the organization's ability to offset revenue pressures with the swift implementation of cost-savings initiatives," Microsoft Chief Financial Officer Chris Liddell said in a statement.
The company noted that software sales to large businesses were stable during the quarter, but that weakness in server and PC sales hit its Windows, server and Office units.
Whereas Intel and EMC have been somewhat optimistic that things may have reached bottom last quarter, Microsoft's comments were less hopeful.
"We expect the weakness to continue through at least the next quarter," Liddell said.
The company didn't have much to say on several closely watched topics. The company did not give a specific sales or earnings outlook for the coming quarter, instead only noting what it expects as far as its operating expenses.
As for Windows 7, Microsoft just noted that it "remains on track for a fiscal year 2010 launch." That's even less specific than its usual comment, which is that it should ship within three years from general availability of Windows Vista, meaning by January. The software maker has been pushing to have Windows 7 out in time to be on PCs by this year's holiday season, with recent indications that the company is still aiming for that goal.
Shares closed Thursday at $18.92, up 14 cents. In after-hours trading, investors sent Microsoft shares higher. The stock was trading recently at $19.85, up 93 cents, or nearly 5 percent.
The PowerPoint slides that Microsoft put out to accompany its earnings report offered a few more nuggets. The company saw its online advertising revenue decline 16 percent, causing that unit to fall below what analysts were expecting.
PC unit sales were down 7 percent to 9 percent during the quarter, but the industry's revenue dropped more than that as Netbooks continued to make up a larger slice of sales--a trend that hurts both the PC makers and Microsoft. Microsoft sold 1.7 million Xbox 360s during the quarter, up 30 percent from a year ago and helping push that unit back into the red.
Here's a look at how each of Microsoft's individual units did during the quarter, in terms of both revenue and operating income.
(Credit:
Microsoft)
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina. 
If you want to be taken seriously, I suggest you first change your nick. It makes it pretty obvious that you are an apple zealot.
If you were going to advise somebody today (4/23/09), which STOCK to BUY would you advise them to buy Apple or M$?? No schoolyard trash-talkin', just some serious, analytical, reasoning and if you say M$, what makes you think M$ is going to outperform Apple over the next six months, year, etc.
Neither. Both are at saturation point.
Financially both AAPL and MSFT are in good shape. Both are cash-rich with a varied product lineup with good margins. No need to pick.
LOL
...except Apple (curiously enough).
"Apple's about to get a lot more flexible. While it has been adding about $1 billion in cash each quarter, analysts predict the company's hoard could surge to nearly $30 billion over the next year because of strong sales of computers, iPods, and iPhones. Apple may well pass Microsoft (MSFT), which has $23.7 billion in cash. "[Apple] could have $40 billion in the bank [in two years]," says analyst Gene Munster of Piper Jaffray"
According to the latest finacials. apple has 25.6 billion cash on hand MSFt has 36.29 billion on hand?
Where are you pulling those numbers out?
According to Yahoo finance...
MSFT has $20.3bn in cash : http://finance.yahoo.com/q/ks?s=MSFT
AAPL has $25.65bn in cash: http://finance.yahoo.com/q/ks?s=AAPL
If you have something authoritative that beats those numbers, please post the source.
One more thing, remember, Microsoft pays dividends every quarter. If they needed an influx of Cash On Hand it is just a board meating away. One quarter of not paying and their total cash on hand would make a huge jump. There is not a need to do that though as they have plenty of cash and quite a few other assets.
The scenario you describe, where MSFT cuts off dividends for a quarter to raise cash? Would never happen, since their stock price would crash hard on the news. While Microsoft had only begun to pay dividends less than (IIRC) 5 years ago, the dividends are part of why the stock price has managed to maintain some stability in recent times.
I think what is causing many people concern (or to crow, depending on your disposition) is whether this is the beginning of a trend or not for Microsoft.
AAPL 11.1 Billion Gross Profit
MSFT 48.82 Billion Gross Profit
...as a whole, Microsoft failed (hard) while Apple actually grew. There's no way to suss out what percentage of that loss was due to a slump in Windows sales, though.
Maybe now Microsoft will finally get it? I'm guessing that, in spite of the facade they put up about their losses being attributed to the PC slump (nope, otherwise explain Mac's numbers being a smaller percentage)... that Microsoft knows they're starting to lose the OS war. What they do about it is anyone's guess, but for those clinging to the notion that Windows 7 will save them, you may want to rethink that guess. Not that Windows 7 sucks, but that with a 2010 ship date, that's a long time to be slipping, even for a behemoth.
If the decline becomes a curve downwards, Microsoft will have a lot of catching up to do...
Were in the middle of a recession.
And why Mac users are so obsessed with marketshare in the first place astonishes me it would only open up the OS to more malware you claiming yourself as a IT would know that.
The first trojans and botnets are already starting to show up.
Man, this is somewhat painful to watch... it's not as ugly as it could have been, but it is ugly - at least for Microsoft.
Everyone is taking a hit.
Find me a company that has not suffered a loss in sales?
Just Bill Gates has more cash in his bank account then Apple has as a company. This is hardly a disaster the media likes to point it out as.
Apple loss 3% Microsoft loss 6% if ms hit the double digit numbers then maybe it might be something to be worried about but Apple is far from overtaking MS and its not something they want as they said before.
Once you realize that (do the match - Apple actually gained overall while Microsoft shrank overall), and the rest falls into place.
Your comments would suggest that you have no idea what you are talking about whatsoever. I'm not certain if that is the case or not, but the uninformed posting you made sure does suggest that.
You really need to compare two companies that are making the same products if you want to 'do the match' as you misspell it. Microsoft does not produce hardware- Apple does. Apple's profit margin on hardware has been very well documented as being one of the leading reasons for their very high prices. MIcrosoft has more products overall than Apple does, but some of those are loss leaders or are in development.
It goes to show that you cannot compare dissimilar companies. It's a common mistake though that many people make. Apple is not Micorosoft and Microsoft is not Apple. You cannot compare the two to each other. Not unless Apple starts selling their OS separately for installation on PC's and Microsoft starts making its own hardware for PC sales. Once that happens, THEN you can compare.
You've committed what is best known as "projection".
The numbers are simple - Apple actually made growth this quarter. Microsoft posted lost sales. What part of this is hard for you to take?
The breakdown is certainly not simple, but Microsoft wound up losing a larger percentage of sales than Apple did in operating systems (Mac+iPhone for OSX which leaves Apple with slight growth, Windows+Windows Mobile for Windows which leaves Microsoft slightly down).
Anyone who can read can look at the numbers and figure out that I'm correct.
PS: It is considered bad form to pick on typos. Bad grammer sure, but typos? Sad.
What astonishes me is that people still believe this nonsense.
Windows 7 will be released fiscal 2010. For Microsoft, isn't that from July 1, 2009 - June 30, 2010? To me that seems a lot closer and less vague than 3 years from Vista's general release because 6 months of their fiscal year 2010 is actually 2009.
Why buy it if it can be downloaded hassle free from a torrent without having to worry about cracking it.
Funny... RedHat is quite profitable, yet they don't do serial numbers on their product source code (see also CentOS, Oracle's Unbreakable Linux, VMWare's control console, and 100's of other derivatives and Red Hat based distros out there...)
RedHat sells support not the OS
@Random_Walk stop squirming please
I said it twice :)
By entering a serial code?
There is 3 uses per license the only time you should ever have to call is if your reinstalling several times or putting on more computers then you should be. And the call is generally quick and painless I don't understand what the huge deal is. Game companies do the same thing.
The big deal is that it is wrong and sleazy. Game companies are just as wrong, look what happened over the Spore snafu.
Microsoft's problems are not caused by Apple in any way.
It is the other way around ... Apple success is caused by the lack of drive and innovation of other companies (like Microsoft, Motorola, Nokia).
MS problems are caused by poor management, lack of vision, lack of direction, and lack of implementing new ideas.
What should Microsoft do?
Streamline / Reduce / Concentrate efforts / Release innovation to the public / Get rid of the CEO
1. Windows 8 should be based on Open Source. Use Linux/Unix as the base. Save development money and potentially increase security. In the future, no OS will matter ... why spend so many resources on a dying product? Remember that most software and services are migrating online and to access a web resource the OS will not matter. Mac OS, Windows, Linux .. it does not matter !!! They all have Internet browsers.
2. Concentrate their mobile efforts on "Windows Mobile". I never understood why Zune and Windows Mobile are not based on the same software.
3. Exploit the XBox success and expand it with more Internet services. It is a computer .. perhaps it could be more than just a game machine.
4. Stop imitating ... start releasing new technologies to the public ... take a risk !!! It is very risky to allow OTHERS (Apple, Netscape, Google) to prove the market and be second to the game. It is time Microsoft allows itself to be once again the pioneer.
5. Fire the CEO. He is a moron. A moron with money .. but he will take the company down. Bring back Bill Gates.
6. Start hiring good talent. Define a team of real experts to start hiring REAL talent. Establish rules to get rid of employees that are not good enough.
No one wants to be stuck with a Mac.
I have things to do.
You stick with Microsoft, I am going to use The Web, Android, and smaller devices for efficiency and mobility, and productivity. Considering your long-term plan, I think Symantec offer a cheaper deal if you are willing to sign up for 10 years of antivirus protection. I will be able to use all my savings on more holidays too.
I'm going to keep that quote for use later when words will be eaten. The cloud will, absolutely, replace the traditional desktop. The question is not "if" but rather "when". Since I used to do my computing on an IBM mainframe terminal it seems odd that the concept is going to return.
The infrastructure is not there. It wont be here for a another decade atleast.
As I said until transfer rates can equate that of within a PC its not going to happen.
No company worth a penny is going to want its data held hostage. You think the security landscape is bad now, just you wait if enough morons jump on the cloud bandwagon. The problems today will seem like a pleasant dream.
"red"? Up 30% and still lose out. $31 mil / 1.7 mil units = $1.8?? Someone please explain.
Lol!
@dream_Fly
the Zune division took a hit
which was the major reason for the fall in entertainment Division
so much for MS fanboys going gaga over it
Ms should just shut it down it's awaste of time and money
the iPod rules any day be it the nano the classic or the Touch
Zunes actually are better then Nano's through Classics in sound quality and features.
ZuneHD will take on the iPod Touch
Look at the figures - 50% fall in shipments during the holidays and now a Loss
instead of all the layoffs they could just shut it down and save face
the Zune Meetoo product was afterall created for the single purpose of
taking away from iPod sales but it failed !
So stop with the mac rants. No matter how great you claim a mac is, "it doesn't matter". More than 90% of the people are not buying it. Is that fair enough?
When that happens you know you have lost the plot. The problem with the Zune is that they have tried to innovate in areas that people don't care about (squirting music? really?) and then failed to deliver an international product. Unless Microsoft "gets serious" about the product line then it will continue to play second fiddle to the iPod. Every other manufacturer manages to sell their devices to a global audience - why doesn't Microsoft?
"EDD operating income decreased primarily due to increased research and development expenses and cost of revenue. Research and development expenses increased $66 million or 18%, primarily reflecting increased headcount-related expenses associated with the Windows Mobile device platform."
I for one have boycotted all their products years ago and I could not be happier with that decision. Amen
Amen
Amen
Please.... grow up.
No one wants to spend an outrageous amount on a Mac especially people who won't use half the **** it includes.
What makes you think that the only alternative to Windows is a Mac? Further, what makes you think that someone will use half the software that comes with a PC? That you would even imply that people like the software that comes with a PC (I believe the term these days is "crapware" or "bloatware") is rather laughable.
Linux and the cloud is going to be Windows downfall and not the Mac. Sorry.
Because until Linux requires absolutely no use of the kernel while allowing people to do absolutely everything including maintenance it is not user friendly enough.
You know how fast a consumer will be turned off to Linux when they goto download a driver and they see a download button and long complicated instructions on how to compile it?
You know how fast a consumer will be turned off to Linux when they goto download a driver and they see a download button and long complicated instructions on how to compile it?"
Damn, why are MS fanboys so stupid?
You do realize that Windows has a kernel, right? Kinda tough to have an OS without one.
Your argument was valid in 1995, downloading and installing a driver is as simple as 1 button click. 10,000+ pieces of software are also available by that same 1 click. And all of it is updated in the same place.
It is Windows that is archaic and hard to use.
God ... bring it on, let those Micro$oft slime-bags go out of business.
MS is Apples only competitor no one wants Linux.
And I would hate to have to use Apple's underpowered pieces of aluminum.
Apple and MS are not competitors! Never have, never will. Apple makes computers, MS makes software (which runs on Apple's computers). How can they be competitors?
Apple competitors are HP, Dell, Lenovo, Sony, Acer etc.
That does not mean that Apple is not a threat to MS; it is, but not by being a competitor.
If Apple and MS were not competitors they would not be making AD's attacking each other.
Red Hat is free, but charges for their support. Again, how rude of them to expect to be paid for all that work they put into making the OS?
Open Source is free, but distributed out of responsibility and support. If you're a geek, that's fine since you are your own tech support. But for the grandmother in Des Moines, Iowa who opens the box, plugs the machine in and then isn't sure what this 'command line' thingy is- well... don't worry, they'll just call you. Maybe.
OS 2 / Wapr is out there too, but then you have to deal with the likes of Commander Spock so... yeah, that has its own issues.
No sir, I think I prefer competition and more choices instead of fewer and less.
Monkeyfun, you and dan and seaspray and the rest of the MS shills don't earn your paycheck.
People, we are in a recession, every economy from here to Timbuktu is in a struggle and so are the Company's around the world. So you can sit there and laugh all you want, Apple is just as susceptible to this economic downturn as Microsoft and it will probably get just as worst for them considering their stature and lack of understanding that the majority of computer users are not interested in the Paris Hilton Collection.
virus scans Spware scans Windows updates O.S reinstalls Definition updates
cleaning the registry and so on !
must be Fun !
I haven't did a registry cleaning ever its actually been proven unnecessary.
Spyware scans my system does that in the background sunday nights at 2am
Reinstalls? Really now? No
Windows updates so you mean to tell me Apple never updates there products?
Definition updates a background thing lasts about 10 seconds no loss time.
All of the above are automated and at times when im not on the pc.
Stop with the FUD its really not necessary and makes you look like a idiot.
The opposite holds true as well. Both have their place.
Sorry, I must have missed something - what makes you think that Apple users use their computer any less than a Windows user? There is no doubt that there are more Windows users than Macintosh users but I think you are stretching a bit here.
I think the important point to note here is that Apple seems (at the moment) to be recession-proof whereas Microsoft isn't. Perhaps that will change.
Thats why Windows ripped the netbook market right from under them?
Even while being offered a choice between the 2?
Good work.
Please go to 1 Microsoft Way to pick up your check.
It was a very unbiased and open test of the public's desires... and they didn't want Linux in a consumer system.
Microsoft has a lot of momentum on the desktop and that means that even a free OS finds it hard to compete because apps are written for Windows and people are use to using Windows.
But the paradigm is changing.
Mark my words, many will be using a browser and web apps and the OS won't matter in time.
Most people find a browser and Web apps even easier to use than Windows.
Google's Android fits this future nicely and my guess is that Microsoft will decline and Web apps will increase.
I already run my whole business via the Cloud, and I only need a browser with a connection and I would never go back to using software that runs on proprietary APIs, unless there is no alternative. I still use Dreamweaver and Photoshop, that's all that is left for me.
The OS is becoming less irrelevant and when it is completely irrelevant, Linux will gain because it is free, light, secure, and able to load the best browsers. Admittedly new tech takes time to catch on and that will give Microbloat more opportunity to suck wealth from the naive, but the trend for them is decline as people catch on to better and cheaper services on the Web via hardware that doesn't need a $200 OS.
As of January 2009, over 90% of netbooks are estimated to ship with Windows XP, which Microsoft sells for about $15. As this market canibalizes Windows, and because people prefer XP to Vista, this will give rise to an expectation that the OS should cost between free and $15.
The answer is not Windows 7 either as that OS on Netbooks will only run 3 apps.
Sell your Microsoft shares now before it is too late.
Win7 will only run three apps on a netbook? Wow, you must have been ripped off on your netbook purchase then since there is no such limit and anyone who told you that is a genius at fooling you into believing it.
Linux *was* the predominant OS on netbooks, but as time kept going and more and more netbooks were offered for sale, that number has dwindled to less than 5% from just two years ago. That's a pretty big drop in market share.
XP or Vista on a netbook? XP, of course. It needs less resources- but then Win7 works quite well on netbooks too, however it's not for sale yet so the jury is out until Win7 is RTM and has been out for a year or so to get numbrs.
http://blogs.computerworld.com/microsoft_well_cripple_windows_7_on_netbooks
http://www.9to5mac.com/microsoft-windows-7-three-3-applications
Do you actually read the articles that you link to or do you just read headlines and nothing else? The three app limit is a license choice by the OEM of the netbook, not Microsoft. You can install the basic home version which has that 3 app limit or any other version of Win 7 that doesn't have that limit. You want to run more? Fine, install the higher end version.
That's not a Microsoft decision. Perhaps you may need some help in doing research? Try Google, Kumo, Yahoo- any of the search engines out there should be able to help.
Ha ha ha.
Putting an OS that is more expensive than the hardware is prohibitive for that market.
Sell your Microsoft shares.
Choices are:
Linux/Android = unlimited apps (FREE).
Windows 7 Crippled = 3 apps
Windows 7 = unlimited apps ($250+)
I can't wait to see this one play out. But whatever happens, it will be an insult to the intelligence of people to buy a MS OS for a Netbook for $250+
This will only create an expectation that an OS should be cheaper than $25.
Sell your Microsoft shares now.
Our company is transferring some 2000 pcs onto Linux.
And Linux is just a joy to use right?
I would rather not have to worry if a particular program needs to be compiled to use.
Or have to use freeware alternatives which may not be better then the real deal.
Windows doesn't need to be fixed all the time I have Windows boxes that have worked for years without needing to be fixed.
Could you also edit Microsoft's Wikipedia article. It is not flattering enough.
Then go to 1 Microsoft way to pick up your check. Thanks for your work.
Perhaps I'll just power up my Mac instead. One OS, one answer.
Even you are not stupid enough to be confused by a single mouse click.
Stop spreading FUD that was outdated years ago.
- by Angmarr April 23, 2009 4:40 PM PDT
- lets hope Microsoft gets going, else we will all be doomed to apple! as i see nobody worth switching to!
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- by shellcodes_coder April 23, 2009 6:06 PM PDT
- That will never happen. Mac will never go mainstream.
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- by t8 April 23, 2009 6:16 PM PDT
- You won't need Apple or Microsoft, and you won't even need a PC.
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- by monkeyfun14 April 23, 2009 6:23 PM PDT
- @t8
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- by t8 April 23, 2009 7:03 PM PDT
- @ monkeyfun14
- Like this
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- by Angmarr April 23, 2009 8:29 PM PDT
- @ t8
- Like this
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- by topgunb2 April 24, 2009 1:30 AM PDT
- @t8, ha ha ha, ha ha ha , ha ha ha, you are ignorant
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- by t8 April 24, 2009 4:10 AM PDT
- In other words you admit defeat.
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- by rapier1 April 24, 2009 7:07 AM PDT
- Okay, so one of the things many people seem to be forgetting when they talk about the cloud and moving everything over to the web is that *delay* matter. You can have a gazillion bits of throughput but you'll never overcome the speed of light. For applications that are delay sensitive you'll end up screwed unless the ASP has infrastructure within the critical delay radius. This can be pretty expensive to put into practice so you'll always have a certain class of applications that can't be run 'in the cloud'. Of course, you could have applications that run inside of a JVM, flash instance, JS, or sliverlight. This could be a valid model but once again you com back to the application's performance being dependent on the local compute environment.
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Showing 1 of 2 pages (161 Comments)The future is a browser accessing the Web platform and the best browsers do not need $250 worth of Windows and you can throw MS Office away.
A small Internet device like a phone that docks into a base with a monitor/keyboard and loads a browser. Then accessing the cloud for services, software, and your home drive from there.
Trust me, this is the future whether you are willing to accept it now or not.
The 21st century is here. Twentieth century paradigms are dying away.
Unless the internet can offer 3gbit transfer speeds for all users simultaneously and allow for advanced gaming and photoshop work then the cloud is going no where.
I am already on the Cloud and wouldn't swap back if you paid me.
I was on the Web in the early 90s and now in the Cloud in the late 00s.
Sounds like you might make the switch early 10s when most others have already.
That is fine and is your choice.
ya totally forgot about that! thx, and transfer speed will improve! its only a matter of time!
20th century paradigms might be dying away but the laws of physics will always be with us.