Microsoft quarterly revenues lower than expected

Microsoft had a worse than expected second quarter it reported, with profits down nearly a third on the second quarter of last year.

All of its five business units saw falls in revenue, with the PC and server arms faring worst. Microsoft's overall quarterly sales dropped 17 per cent to US$13.1 bn, about a billion worse than the stock market was expecting and the company’s share price fell by seven per cent at the news.

“While economic conditions presented challenges this year, we maintained our focus on delivering customer satisfaction and providing solutions to our customers to save money,” said Kevin Turner, chief operating officer at Microsoft.

“I am very excited by the wave of product and services innovations being delivered in this next fiscal year.”

For the fiscal year ended June 30, 2009, Microsoft reported revenue of US$58.44bn, a 3 per cent annual decline. Operating income, net income and diluted earnings per share for the year were US$20.36bn, US$14.57bn and US$1.62bn, which represented declines of 9 per cent, 18 per cent and 13 per cent respectively.

“Our business continued to be negatively impacted by weakness in the global PC and server markets,” said Chris Liddell, chief financial officer at Microsoft.

“In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter.”