updated 05:05 pm EDT, Thu April 23, 2009
Microsoft Q3 2009 Results
Microsoft today provided a sharp contrast to Apple's performance and reported a rare drop in its revenue for its March quarter. Compared to the same period in 2008, Microsoft's revenue sank 6 percent to $13.65 billion. The news was also compounded by troubles with income, as it gained 3 percent in operating income but plunged 32 percent in net income to $2.98 billion.
The firm mostly attributes the drop to the poor world economy but notes that it took a $710 million blow from a combination of severance pay from its 5,000 job cuts announced in January as well as damage to its investments.
In contrast to its previous quarter, however, Microsoft declines to provide specific impacts by division and says only that its client, business and server divisions were "negatively impacted" by poor PC and server sales. The client division handles both Windows and Office and by itself saw an 8 percent decline in the previous quarter, suggesting that it may have contributed the most to the shortfall; enterprise sales, where business and server sales are more likely, were "stable" according to Microsoft claims.
Company chief operating office Kevin Turner argues that the company's research and development will help Microsoft remain in a "great position to compete" and points to important releases in the second half of the year that should carry the developer, including Windows 7, Windows Mobile 6.5 and Windows Server 2008 R2.
The fiscal result arrives just as Apple's own revenue climbed 8.7 percent year-over-year to $8.16 billion on the back of on-target Mac sales and higher than expected iPhone sales; late in the last quarter, Microsoft began running a series of ads hoping to discourage users considering switching to Macs from Windows PCs.