Microsoft Misses Revenue Estimate By $1.3 Billion

Although, for the sake of your eyesight, this article hasn’t been written in red ink, financial types might want to just go ahead and imagine it that way. The earnings report Microsoft released this afternoon contained all sorts of bad news.

The second sentence of the official release pretty well summed things up: "Operating income, net income and diluted earnings per share for the quarter were $3.99 billion, $3.05 billion and $0.34 per share, which represented declines of 30%, 29% and 26%, respectively, when compared with the prior year period."

All of those numbers came in under analysts’ estimates, too.

Then here’s the real doozy: while analysts wanted to see $14.4 billion in revenue, Microsoft reported $13.1 billion (which represented a year-over-year drop of 17 percent).

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

But, with no pun intended, it doesn’t look like investors are buying it. Microsoft’s stock is down 7.86 percent in after hours trading.

There are 4 Comments. Add Yours.

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chiropractor hampton
July 24, 2009 at 1:29 am

I don’t get it how can you not know how much money your company makes? Do you not keep those kinds of statistics? Someone is recording this stuff. Or am I totally not understanding what you wrote in this article?

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Danxo Tyler
July 24, 2009 at 3:07 am

Microsoft might want to blame the economy for their downturn, but the truth is that it was their last OS – Vista – which was poison to millions of PC users – that contributed heavily to their losses. And they deserve it.

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Joe Hayes
July 26, 2009 at 3:59 pm

With the OS software Vista they put out software that requires some actual ability on how to operate a PC with so many of the PC users out there it has become a copy and paste world. I miss the days of bulletin boards when you had to write Dos commands and the internet was free. I do think Microsoft will be just fine even though a lot of people had trouble with Vista, the tools and capability of Vista is fantastic I use Vista Ultimate and would not trade it for anything else.

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Guest
July 26, 2009 at 9:30 pm

Also when Vista not the best OS but the people use it, they use it because it comes with the PC. If we buy an MAC, we also buy this OS. I bought my version perhaps I mad my PC by myself.
That’s means that Microsoft depents with the turnover from the market of hardware-sales with 60%.

I think it is the economic situation for the result.