Microsoft experiences first quarterly fall in profits

| April 25, 2009

For the first time in over 23 years, Microsoft has experienced its first ever year-on-year decline and the fall in sales is expected to continue for at least another three months.

However, investors had feared that the company’s results could have been worse.

Net profit at Microsoft fell by 32 percent to $2.98bn as revenue fell by 6 percent compared to the same period last year as consumers have made cut backs on spending to upgrade technology packages.

Chris Liddell, Microsoft’s chief financial officer, said that the forecast was bleak and that the recovery may be long and slow.

The company has been hit by write-downs of $420m in the value of investments and nearly $300m in redundancy charges were paid as staff numbers were cut at the turn of the year when Microsoft announced that it would be cutting 5,000 jobs.

Liddell warned that the current economic conditions were the worst the company had ever faced in its 30-year history and, as a result, sales in the company’s client division have fallen by 15 percent.

Microsoft has made a series of unprecedented cuts such as reducing travel budgets and delaying the expansion of its headquarters.


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