Microsoft profit falls, sees business tough all year

By SiliconIndia   |    5 Comments
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Microsoft profit falls, sees business tough all year
Bangalore: The slump in global PC sales and broad economic weakness is still dragging on Microsoft's revenue and profits. The company reported a 29 percent drop in Q4 profit. Microsoft did not give a specific earnings or sales forecast for the current quarter, which runs through the end of September.

Christopher Liddell, CFO, Microsoft says, "We expect business to be tough for the remainder of 2009. The economy continues to be challenging and we need to lift our game." Search revenue was flat compared to last year, despite the launch of bing.com during the quarter. However, the company has seen a double digit increase in unique users.

On the PC side, Liddell said, "There is an opportunity for improvement next year, both from possible higher PC sales in general and perhaps from business PC growth starting to outpace consumer PC growth." This year, consumer PC spending has been stronger than business, resulting in lower average selling prices for Windows, a trend exacerbated by the growth of Netbooks, for which Microsoft typically gets even less revenue. "We saw unit increases in both Windows and Windows server for the first time in a year, though revenue has continued to slide, with Netbooks making up 11 percent of PC units, said Liddell."

Most of the analysts feel that Microsoft's profits were negatively impacted by charges related to its forthcoming operating system (OS) rollout and other legal costs. "We have been fighting the free OS for some time," Liddell said.

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