Microsoft did not do as well as Wall St. had hoped. The company posted revenue of $13.1 billion and EPS of $.34 . Analysts were looking for $.36 on $14.38 billion in revenue, A year ago, the world’s largest software company earned $.46 on nearly $15.84 billion in sales, which means that revenue dropped 17%.
Shares fell 8% on the news.
Numbers from most of the divisions were week. Client revenue dropped to $3.1 billion from $4.4 billion. Sever and tools revenue was down less sharply from $3.7 billion to $3.5 billion. Online revenue dropped to $837 million from $831 million. Business division revenue dropped sharply from $5.3 billion to $4.6 billion and Entertainment and Devices revenue from $1.6 billion to $1.2 billion.
Segment operating income also worsened in each business unit:
Operating Income (Loss) Q609/ Q609 Year 09 Year 08
———————–
Client $2,167 $3,250 $10,856 $13,105
Server and Tools 1,349 1,369 5,327 4,539
Online Services Business (732) (485) (2,253) (1,222)
Microsoft Business Division 2,816 3,359 12,141 12,369
Entertainment & Devices (130) (171) 169 497
Corporate-level activity (1,483) (1,643) (5,877) (7,017)
—— —— —— ——
Consolidated $3,987 $5,679 $20,363 $22,271
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Microsoft is providing operating expense guidance of $26.6 billion to $26.9 billion for the full year ending June 30, 2010.
Things are getting bad in Redmond. Windows 7 will have to be a hit, or it will be a long decade.
Douglas A. McIntyre
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