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Microsoft’s revenues fall 6% in its first ever quarterly drop

Warwick Ashford

Microsoft's revenue of $13.65bn posted yesterday for the first three months of 2009 is 6% lower than for the same period last year.

This the first quarterly drop in revenues for the software maker in its history, proving that almost no tech company is invulnerable to the effects of the economic downturn.

The firm's net income declined 32% to $2.98bn and earnings per share fell 30% to 33 cents a share compared with a year ago.

Microsoft said revenues from enterprise customers had remained stable, but other areas of the business had been hit by falling demand in the PC and server markets.

The biggest losses were in the PC operating system business, which fell 16% to $3.4bn, and the internet division, where revenues dropped 14% to $721m.

"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," said Chris Liddell, chief financial officer at Microsoft.

However, Liddell does not share the view of other technology companies like Intel that say the worst of the economic downturn is past.

"We expect the weakness to continue through at least the next quarter," he said.

Even Apple, which posted strong first quarter results this week, did not forecast equally strong results for the next three months.


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