Microsoft releases Q4 results, profits down 29%

According to a press release, Microsoft has released its fourth quarter results ending June 30, 2009. Microsoft announced a revenue of $13.10 billion. That's down 17% from last year. Net profit for the period was $3.1bn (£1.9bn), down by 29% from the same period a year earlier.

"Our business continued to be negatively impacted by weakness in the global PC and server markets," said Chris Liddell, chief financial officer at Microsoft. "In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter."

In a conference call, Chris Liddell said, "We don't expect conditions to improve much, but we don't expect them to worsen either".

Client revenue was the main headline according to ZDNet. Here's an explanation from Microsoft:

Client revenue decreased primarily as a result of PC market weakness, especially PCs sold to businesses, and a 13 percentage point decline in the OEM premium mix to 59%. Revenue growth from Windows operating systems was also impacted by a $276 million deferral for the Windows 7 Upgrade Option program. OEM revenue decreased $1.1 billion or 31%, while OEM license units decreased 10%. Based on our estimates, total worldwide PC shipments from all sources declined approximately 5% to 7%, driven by decreased demand in emerging and developed markets.

This comes as no surprise since research from Gartner predicted that worldwide PC sales would drop 6% from last year's levels despite Windows 7, which was just recently finalized, and has shown strong pre-order sales.

In terms of it's business outlook, Microsoft is providing operating expense guidance of $26.6 billion to $26.9 billion, for the full year ending June 30, 2010.

Images courtesy of ZDNet

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ccoltmanm said,
They will adapt and change to the environment they are in, or they will fail.

Microsoft are too big to fail anytime soon, they still have loads of money, and are making loads of money. They still have the OS and Office franchise to real in trucks full of cash every day. Sometime xbox might start turning a profit as well, and zune.

ccoltmanm said,
They will adapt and change to the environment they are in, or they will fail.

It's more an issue of tightening up their belt and weathering the storm. There's not a whole lot to adapt to.

ccoltmanm said,
They will adapt and change to the environment they are in, or they will fail.

Yup, as can be said for any tech company in the world.

I want a Zune HD. But I have a PDA phone with an 8gb stick...it's like, I just can't justify the purchase. Really wanting one doesn't change the fact that what I've got serves essentially the same purpose.

Tho' that Zune software sure is snazzy...

Ouch.

With Apple and Red Hat both increasing their profits during these economic times, one must wonder what Microsoft could have done differently. Whether it is promoting/marketing other devices (Zune, XBox) differently to keep overall corporate profits up, or something else... Either way, their competition is doing it, and Microsoft needs to redouble their efforts and take another look at their strategies for their various platforms and maybe come out with a new game plan.

Who knows? Windows 7 might change things again for them here in a little bit.

markjensen said,
Ouch.

With Apple and Red Hat both increasing their profits during these economic times, one must wonder what Microsoft could have done differently. Whether it is promoting/marketing other devices (Zune, XBox) differently to keep overall corporate profits up, or something else... Either way, their competition is doing it, and Microsoft needs to redouble their efforts and take another look at their strategies for their various platforms and maybe come out with a new game plan.

Who knows? Windows 7 might change things again for them here in a little bit.

TBH it's a product of the recession (nobody wants to spend on upgrades) and the big wait for W7 to launch. Pre-orders are stratospheric (great marketing scheme really..) which is pretty indicative of the love of W7 that's out there.

Lechio said,
Many of the stock holders are now probably thinking: "Why didn't I go with Apple...?" ;)

I think that a lot, because I remember when Apple's stock was at ~14. I was amongst the people who thought Apple was doomed, but then Steve Jobs came back with all the i____ stuff. Actually, had it not been for Bill Gates' investment Apple really would have been doomed!

MS is a rudderless ship these days launching as many "me too" products as fast as they can. Some are good (Xbox 360, Silverlight), some are bad and many are just not memorable. Three advertising campaigns in as many months, a brief focus on Live services, re-branding Live Search to Bing, hey look at this, never mind, look at this, etc... Hey look at the Zune, nevermind, we are putting Zune software into Windows Mobile, nevermind look at these overpriced Macs, but let's punish/restrict our OEM partners from building too many netbooks as those cut into our margins a little too deeply.

Clearly MS marketing and a few other key execs need to go.

bob_c_b said,
MS is a rudderless ship these days launching as many "me too" products as fast as they can. Some are good (Xbox 360, Silverlight), some are bad and many are just not memorable. Three advertising campaigns in as many months, a brief focus on Live services, re-branding Live Search to Bing, hey look at this, never mind, look at this, etc... Hey look at the Zune, nevermind, we are putting Zune software into Windows Mobile, nevermind look at these overpriced Macs, but let's punish/restrict our OEM partners from building too many netbooks as those cut into our margins a little too deeply.

Clearly MS marketing and a few other key execs need to go.

So, aside from not getting anywhere on search still they're basically pretty darn focused? Hardly rudderless!

dangel said,


So, aside from not getting anywhere on search still they're basically pretty darn focused? Hardly rudderless!



Yes, if you call changing strategies and ad campaigns every few months focussed, then yes. If you call a steady barrage of "me too" products focus, yep.

bob_c_b said,


Yes, if you call changing strategies and ad campaigns every few months focussed, then yes. If you call a steady barrage of "me too" products focus, yep.

Ah, so bad business is to change tact when things aren't working? And ad campaigns are static too? Since when? Ridiculous. You might wanna go back to business school - if your competitor makes inroads to a new market then you better get a "me too" product going or you'll *never* get market share. Heck, when we plan a new product we *also* plan for when our competitors are likely to bring their response to market too. You point at product failures, but fail yourself to note MS' ability to get into markets they've had no historical background. Xbox? Think Adobe are ignoring Silverlight? Better not be, it's a much better product directly linked to .NET (itself shaping up to be a killer enabling product for the desktop AND web). And yet this *rudderless* company comes up with Win7 in *direct* response to critism from it's customers and delivers it early too.. still it's only their primary product, right? Idiots yeah - totally pathetic.

bob_c_b said,



Yes, if you call changing strategies and ad campaigns every few months focussed, then yes. If you call a steady barrage of "me too" products focus, yep.


I don't know about you but I've seen the same "rudderless" stuff come from apple. it doesn't matter if some products are "me too"; at the end of the day it doesn't matter which one came first, it matters about which one is better.

Before i've seen apple advertise the iPod nano for a few months and then go to the mac vs pc ads and then to the newest ipod touch and then back to the mac vs pc ads. They advertise what is new. When Windows Live Photo Gallery was new, they advertised it, when Bing was new, they advertised it, the prices for laptops aren't new but the economic times are somewhat new. When the new Zune HD comes out i'm certain they will advertise the heck out of it. The same will happen when the new ipod touch with a camera is released.

It's all about the iPods and iPhone..they will continue to make a killing unless someone comes up with a "hyper" product line. We've all been waiting 2+ years.

Buy your MS shares now before Win7 comes out. That is going to make them and you (if you're smart) a metric ****-ton of money.

They need to speed up development and release more stuff. I've known some people who couldn't wait forever to get a Zune HD or a device with Windows Mobile 6.5/7 so they went somewhere else.

How many people are just not buying computers because they don't need anything else to go to that web page to do their taxes?

It's also funny that Apple's profits are up... Vista vs OS X, Zune vs iPod/iPhone?

Why the **** does apple keeps getting mentioned in the ****ing comment section, this article has nothing to do with apple and people keep mentioning them. And people wonder why so much people hate apple fanboys and there so many flame wars, goes the same for the other way around. please gtfo

If you're an Apple fanboy, it has everything to do with it.

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