Sales of the Windows operating system fell 29 percent in the fiscal fourth quarter, Microsoft reported Thursday. The news sent the company’s stock down nearly nine percent at noon Eastern time Friday.
Microsoft said Windows sales for the quarter were $3.1 billion, down from $4.4 billion in the year-ago quarter. For the full fiscal year, Windows sales declined 13 percent, to $14.7 billion from $16.9 billion. Some businesses have avoided Windows Vista, and Microsoft will release Windows 7 in October.
Weak Demand Blamed
The company reported earnings below analyst expectations, with profits down 29 percent to $3.05 billion, compared to $4.3 billion in its 2008 fourth quarter. Microsoft blamed weak demand for PCs and servers.
Per-share earnings fell 26 percent to 34 cents versus 46 cents a year ago. Revenue was down 17 percent to $13.1 billion from $15.83 billion in the 2008 fourth quarter. Analysts, who had expected earnings of 36 cents per share, called the results disappointing, and J.P. Morgan said it “doesn’t sound like it will get much better any time soon.”
“Our business continued to be negatively impacted by weakness in the global PC and server markets,” said Chris Liddell, Microsoft’s chief financial officer. “In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter.”
Microsoft affirmed that job cuts will total 5,000, as it said in January. It said search advertising was “flat,” while online advertising sales fell 14 percent for the quarter.
No Financial Guidance
“While economic conditions presented challenges this year, we maintained our focus on delivering customer satisfaction and providing solutions to our customers to save money,” said Microsoft COO Kevin Turner. “I am very excited by the wave of product and services innovations being delivered in this next fiscal year.”
Despite Turner’s optimism, Microsoft again declined to…