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Microsoft’s profits continue to fall

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Hit by recession Microsoft’s profit continues to fall at an accelerating speed. For the quarter ending June 30, Microsoft’s revenue fell by 17 per cent to $13 billion. Net profit fell faster and steeper by 29 per cent to $3 billion. Earnings per share were down 12 cents to $0.34.

The result has disappointed analysts who expected the Redmont giant to post a revenue of $14.37 billion and Microsoft shares fell more than 7 percent.

The disappointing performance was spread across all business units. In the Windows unit revenue fell 28 per cent to $3.1 billion. Microsoft generates the bulk of its profit from Windows operating system and Office suite of products.

Recession has prompted many customers to hold back on PC and software purchases. 

Microsoft also said customers were deferring purchases and waiting for Window 7, due to ship on October 23. It sees sales picking up in later part of the year from an improving economy and Windows 7.

Thanks to aggressive cost cutting and staff rationalization. Microsoft was able to achieve over $750 million of operational savings compared with the prior year quarter.

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