MICROSOFT, THE world’s largest software maker, reported fiscal first-quarter profit and sales that fell short of analysts’ estimates, as declining personal computer sales crimped demand for Windows, its core operating system.
Net income fell to $4.47 billion, or 53 cents a share, in the three months through September 30th, from $5.74 billion, or 68 cents, a year earlier, the Redmond, Washington-based company said in a statement.
That fell short of the 56-cent average estimate of analysts polled by Bloomberg.
Sales fell 7.9 per cent to $16 billion, compared with the $16.4 billion average estimate of analysts.
Microsoft’s Windows unit revenue is suffering in a depressed PC market as some consumers switch to buying tablets.
During the quarter, global PC shipments fell 8.3 per cent from a year earlier to 87.5 million, market-research firm Gartner said last week. Microsoft is betting on the Windows 8 operating system, which goes on sale next week, to vault it into the tablet market and restore consumer demand.
“PC is just a portion of the business, but when it’s your flagship people tend to pay attention to it,” said Colin Gillis, an analyst at BGC Partners LP in New York. “Clearly tablets are taking share.”
During the quarter, Microsoft deferred revenue from both the Windows and Office businesses to account for upgrade coupons that let customers upgrade to new versions of software. Microsoft shares fell in extended trading to $29.15 after the report.
The stock had closed at $29.5 in New York. It fell 2.7 per cent in the three months through the end of September. – (Bloomberg)
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