Microsoft has made history – by announcing it's first year-on-year quarterly revenue decline since its stock was first traded 23 years ago. The software giant yesterday reported revenue of $13,65-billion for the third quarter ended 31 March 2009, a 6% decline from the same period of the prior year.
Operating income, net income and diluted earnings per share for the quarter were $4,44-billion, $2,98-billion and $0,33 per share, which represented an increase of 3% and declines of 32% and 30%, respectively, when compared with the prior year period.
The financial results for the quarter included $290-million of severance charges related to the previously announced plan to reduce up to 5 000 positions and $420-million of impairments to investments. Combined, these two charges reduced earnings per share by $0,06.
Revenue in Client, Microsoft Business Division, and Server & Tools was negatively impacted by weakness in the global PC and server markets. Revenue from enterprise customers remained stable during the quarter.
"With our continued R&D investment and our broad suite of products and services, we remain in a great position to compete and gain share in the marketplace," says Kevin Turner, chief operating officer at Microsoft.
During the quarter, Microsoft released the beta version of the Windows 7 operating system, which remains on track for a fiscal year 2010 launch. Development milestones were achieved on other products including Microsoft Office 2010, Windows Server 2008 R2 and Windows Mobile.
"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," says Chris Liddell, chief financial officer at Microsoft. "We expect the weakness to continue through at least the next quarter."