Microsoft quarterly revenue drops for first time in 23 years

Software giant Microsoft reported a decline in quarterly revenue for the first time in 23 years as adverse economic conditions globally took a toll on the entity’s business.

Hit by plunging sales, Microsoft saw its profit plunge to a little below $3 billion for the third quarter ended 31 March, 2009.

The software major posted a six per cent fall in revenue at $13.65 billion, the first of its kind since the company went public 23 years ago. In the year-ago period, Microsoft's revenue stood at $14.45 billion, the firm said in a statement.

The entity's third-quarter profit slumped 32 per cent to $2.97 billion. It had a profit of $4.38 billion in the year-ago period. With the global economic turmoil hitting the personal computers and server markets, the software giant had a negative impact on various business segments, including ‘Microsoft Business Division’ and ‘Server & Tools’. Striking a gloomy note, the company’s Chief Financial Officer Chris Liddell warned the “weakness to continue through at least the next quarter”. “While market conditions remained weak during the quarter, I was pleased with the organisation’s ability to offset revenue pressures with the swift implementation of cost-savings initiatives.

“We expect the weakness to continue through at least the next quarter,” Liddell said. The third quarter results include severance charges to the tune of $290 million related to plan to slash 5,000 positions in the company. Microsoft also incurred impairments to investments worth $420 million. For the nine months ended 31 March, 2009, the company registered a profit of $11.52 billion against $13.38 billion in the corresponding period a year ago. During the same time, the entity's revenues touched $45.33 billion whereas the same stood at $44.58 billion in the year-ago period.

Meanwhile, Microsoft expects expenses to be in the range of $26.7 billion to $26.9 billion including severance charges for the full year ending 30 June, 2009.