Microsoft Shares Plunge On Windows Decline - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Software // Operating Systems

Microsoft Shares Plunge On Windows Decline

Software maker says sales of its key operating system franchise were off almost 30% last quarter.

Microsoft said sales of its core Windows operating system declined 29% in its fiscal fourth quarter due to weakness in the personal computer market and deferred Windows 7 revenues.

Microsoft shares were off more than 8% in early Friday trading on the news.

Windows 7 screen shot
(Click for larger image and for full photo gallery)

For the three months ended June 30, Windows sales were $3.1 billion, compared to $4.4 billion in the same period a year ago. Windows sales were off 13% for the full fiscal year, falling to $14.7 billion from $16.9 billion the year prior.

"Client revenue decreased primarily as a result of PC market weakness, especially PCs sold to businesses," Microsoft said Thursday.

Businesses have largely shunned Microsoft's current operating system, Windows Vista.

The company is hoping that the introduction of Windows 7 in October will help to reverse its fortunes. Microsoft deferred $276 million in revenue during the quarter due to a program under which consumers who purchase a Vista PC can upgrade to Windows 7 for free when the latter becomes available Oct. 22. Microsoft officially released Windows 7 to manufacturing on Thursday.

The lackluster performance of Microsoft's client unit mirrored weakness throughout most of the company's lines.

Total second quarter revenues came in at $13.1 billion, down 17% from the prior year. Net income fell 29% to $3.05 billion, while earnings per share were off 26% at $0.34.

"Our business continued to be negatively impacted by weakness in the global PC and server markets," said Chris Liddell, Microsoft's chief financial officer, in a statement. Liddell noted that Microsoft cut operating expenses by $750 million during the quarter in an effort to cope with the downturn.

Microsoft said it expects to post operating expenses between $26.6 billion and $26.9 billion in the fiscal ending June 2010.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
What Becomes of CFOs During Digital Transformation?
Joao-Pierre S. Ruth, Senior Writer,  2/4/2020
Fighting the Coronavirus with Analytics and GIS
Jessica Davis, Senior Editor, Enterprise Apps,  2/3/2020
IT Careers: 10 Job Skills in High Demand This Year
Cynthia Harvey, Freelance Journalist, InformationWeek,  2/3/2020
White Papers
Register for InformationWeek Newsletters
Current Issue
IT Careers: Tech Drives Constant Change
Advances in information technology and management concepts mean that IT professionals must update their skill sets, even their career goals on an almost yearly basis. In this IT Trend Report, experts share advice on how IT pros can keep up with this every-changing job market. Read it today!
Flash Poll